What Happens to CalPERS Benefits When You Change Retirement Systems?
NOTE: the scope of this article extends only to applying and implementing the California Public Employees’ Retirement Law (CalPERS); it does not extend to laws or regulations governing how other public retirement systems are administered.
Public employees occasionally move from one employer to another. For example a firefighter may take a job with a new fire department. This raises the question of what happens to accrued (built up) retirement and related benefit rights from the first employer.
If you were a member of the California Public Employees’ Retirement System (CalPERS), you may be eligible for “reciprocity”. Simply stated, reciprocity is an agreement between different public retirement systems that allows members to move from one public employer to another public employer without losing valuable benefit rights – including retirement.
However, reciprocity is a complicated subject. Additionally, membership and benefit obligations and rights of each retirement system can vary.
CalPERS Reciprocity Creates Membership in BOTH Systems
The most important thing to understand about reciprocity is that there is no transfer of funds – and no transfer of service credits – between retirement systems when you establish reciprocity. With reciprocity you become a member of both systems. This means that you are then subject to the membership and benefit rights and requirements of both systems (unless expressly modified by the terms of the reciprocity agreement).
So – with reciprocity – you still must apply to retire from each system separately, and you will receive separate retirement allowances from each retirement system. However, you must retire on the same date from both public retirement systems participating in your reciprocal agreement for all benefits of reciprocity to apply.
Additionally, if you are trying to establish reciprocity by re-depositing formerly withdrawn CalPERS contributions, your retirement date can be no earlier than the day following CalPERS’ receipt of your election to purchase this service.
Also, if you moved to another system before the effective date of the reciprocal agreement with that system – and you would have been eligible for reciprocity IF that agreement had been in place – your retirement allowance will be based on your highest final compensation under either system as long as you retire from both systems on the same date.
Keep in mind that, in any case, even if you do not qualify for the full benefits of reciprocity, certain benefits may still be available to you from CalPERS.
If you have moved from one public employee retirement system to another, and you are trying to understand the benefits for which you qualify, our experienced disability lawyers would be happy to talk to you.