State Second Tier
Current state miscellaneous or industrial Second Tier members, and other members who have past state Second Tier service, may be eligible to convert their Second Tier service credit to a First Tier retirement formula. When you convert past Second Tier service, any Second Tier member contributions paid since July 2013 will be factored into the conversion cost.
Carefully consider your decision to convert from the Second Tier to First Tier retirement formula. Your election to convert to the First Tier retirement formula cannot be changed and will increase the monthly retirement contributions withheld from your paycheck.
Review the following information to determine which tier conversion option you're interested in. You can use the Retirement Estimate Calculator to generate a retirement estimate based on the following scenarios:
This option authorizes CalPERS to change your CalPERS retirement formula from the Second Tier to the First Tier retirement formula on a prospective (future) basis. When your CalPERS retirement formula has been changed to the First Tier, you’ll begin having First Tier retirement contributions withheld from your paycheck on a prospective basis. Once your First Tier contribution deductions begin, you can elect to convert your past Second Tier service.
This option allows you to remain in the Second Tier retirement formula and no action is required.
This option authorizes CalPERS to change your CalPERS retirement formula from the Second Tier to the First Tier retirement formula on a prospective (future) basis. When your CalPERS retirement formula has been changed to the First Tier, you’ll begin having First Tier retirement contributions withheld from your paycheck on a prospective basis. You can then decide to leave your Past Second Tier service under the Second Tier retirement formula.
Eligibility
In order to convert past Second Tier service, you must meet all the following conditions:
- You're not retired.
- You have Second Tier service credit with CalPERS.
- You've elected First Tier for your future service credit.
- You were an active state member on or after January 1, 2000.
You can elect to convert Second Tier service to the First Tier retirement formula if you reinstate after retiring with Second Tier credited service. However, you must earn a minimum of one year service credit from your reinstatement date before your next retirement can be based on the First Tier retirement formula.
State Miscellaneous and Industrial Retirement Formulas
The following are the Second Tier retirement formulas with their corresponding First Tier retirement formulas. To determine which formulas apply to you, consult your personnel office.
| Second Tier Retirement Formula | Corresponding First Tier Retirement Formula |
|---|---|
| 1.25% at age 65 | 2% at age 55 |
| 1.25% at age 65 | 2% at age 60 |
| 1.25% at age 67 | 2% at age 62 |
Refer to the State Miscellaneous & Industrial Benefits (PUB 6) (PDF) publication to compare the differences between the retirement formulas.
Cost
The cost to convert Second Tier service credit is based on factors that include:
- Past service credit purchases credited under a Second Tier retirement formula recalculated as First Tier (plus interest), if applicable
- Previously refunded First Tier member contributions (plus interest), if applicable
- Retirement contributions you would have paid (plus interest) as a First Tier member, offset by any Second Tier contributions paid since July 2013
Use the Estimating First Tier Contributions (PDF) worksheet to estimate your new contribution amount. Contact your personnel office for more information.
Request Process
You may be eligible to request to convert to the First Tier formula. To request electronically, log in to myCalPERS. Go to the Retirement tab, select Service Credit Purchase, and select the Convert to First Tier button. Your election to convert to the First Tier retirement formula is irrevocable and will increase the monthly retirement contributions withheld from your paycheck.
We’ll process your election to convert your formula to First Tier and notify your employer. Once your employer reports payroll and the First Tier contributions are taken, the cost and election details to purchase your past Second Tier service will be available for your review in myCalPERS. Purchasing your past Second Tier service is optional.
If you’re already in First Tier and are interested in purchasing your past Second Tier service, you can submit your request online. To request electronically, log in to myCalPERS. Go to the Retirement tab, select Service Credit Purchase, and view the Available Purchase Options where you can request the cost.
Once we receive all required documents and determine eligibility, the cost and election details will be available in myCalPERS for your review within 60 days. View the Payment Options to learn about ways to pay for the conversion.
