The CalPERS Pension Explained: How to Calculate Your Retirement Income

The CalPERS pension formula is straightforward once you understand its three components: service credit, age factor, and final compensation.

The Formula

Monthly pension = (Service Credit × Age Factor × Final Compensation) ÷ 12

Service Credit

Service credit is the number of years you have worked for CalPERS-covered employers. One year of full-time service equals one year of service credit. Verify your service credit at myCalPERS.ca.gov. Do not assume it is correct. Errors are more common than most employees realize.

Age Factor

The age factor is a percentage that increases with your age at retirement. For BU17 nurses under the 2.5% at 55 formula, the age factor ranges from 1.1% at age 50 to 2.5% at age 55 and above. Retiring at 55 rather than 50 increases your age factor by more than double.

An Example

A BU17 nurse with 30 years of service, retiring at age 55 with a final compensation of $120,000: 30 × 2.5% × $120,000 = $90,000 per year, or $7,500 per month. This benefit is paid for life, with a COLA of up to 2% per year.