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Pension Reform Update

To All Employees:

No doubt you’ve read in the newspapers and the recent CalPERS Newsletter about the recent changes in the CalPERS’ pension benefit.  For current employees there is very little impact at this time.  The two changes are:

  1. Purchase of “Air-Time” - After 1/1/13 employees may no longer purchase 1 – 5 years of service credit (“Air-Time”).  If you are interested in purchasing “Air-Time”, go to the CalPERS website (  You will be able to calculate the cost.  CalPERS will process any applications received no later than 12/31/12.  Applications received after 12/31/12 will be denied.
  1. Post-Retirement Employment – Our current campus policy requires a 60 calendar day waiting period after the retirement date before being rehired as an Annuitant. Anyone retiring after 12/31/12 will not be eligible for employment as a rehired annuitant for 180 days following the date of retirement. For employees retiring before 12/31/12 we are waiting for a response from CalPERS whether there will be any waiting time before being eligible for appointment as a rehired annuitant.  This provision does not apply to faculty members entering FERP status.  It appears the provision does apply to Lecturers who retire and want to be rehired as Annuitants.

The employee contribution toward the cost of retirement will continue to be 5% of monthly salary, less an exclusion allowance of $513 for coordination of social security.  (Note: contribution rates for employees in the Public Safety plans are different, but will not change for current employees.)  The law does permit this contribution to increase in 2018.  For represented employees any change would have to be negotiated.

New employees will have a plan with a different retirement formula.  Their contribution rate will be different, but we do not know what it will be.

We have many unanswered questions about the impact of the Pension Reform Bill on future employees.  Most of these answers will have to be provided by CalPERS Pension Reform Impacts.  When information is available it will be posted at CSU Systemwide HR Pension Reform Update.

Sharyn Abernatha
Assistant Vice President for Staff Human Resources
California State University, Chico
Phone: 530-898-6771