SCERA administers a defined benefit plan, which means that your lifetime retirement allowance is defined by a formula. SCERA currently offers two Plans. Plan A, also known as the Legacy Plan, is for members who entered the retirement system prior to January 1, 2013. Plan B was established pursuant to the Public Employees' Pension Reform Act of 2013, covers most members who entered the retirement system January 1, 2013 or later. Plan B is also known as the PEPRA plan. Prior membership in SCERA or another California public retirement system may determine whether a member is in Plan A or Plan B.
The age factors for the Plans are:
Your lifetime retirement benefit is calculated at the time of retirement by multiplying three factors:
- A percentage, which is determined by your age at retirement
- Highest one-year (Plan A) or three-year (Plan B) pensionable compensation
- Total earned/purchased service credit
Increasing any of the three factors increases the amount of your lifetime retirement benefit.
1. Age at retirement
Your age at retirement, measured to the completed quarter year, is attached to a percentage. Your retirement benefit is a percentage (based on your retirement age) of your highest one-year or three-year average pensionable compensation. You can view the age factors for your Plan by clicking on the appropriate link above.
2. Highest compensation
One factor of the benefit formula is your highest consecutive one-year average pensionable salary for Plan A members, or your highest consecutive three-year compensation for Plan B members. For part-time employees, SCERA uses the necessary hours for a one- or three-year equivalent. This consecutive income can be at any time in your career where your pensionable earnings are highest. Overtime pay is not pensionable and is excluded from your final compensation calculation. Your Personal Statement of Benefits and formal retirement estimates display the highest average monthly salary based on your actual pay history.
3. Service credit
Service credit measures the amount of time you have been participating in the Plan, plus any purchases of eligible service credit completed. Service credit is earned for the time you are in paid status, including time you are on paid vacation, holiday or sick leave. You do not earn service credit if you are on leave without pay. Years are not measured by beginning and ending dates, but by the accrual of service credit hours in each pay period or purchased as additional service credit. Part-time members earn service credit at a slower rate.
The calculation of your benefit is simply a matter of multiplying the three factors. A percentage (based on your age at retirement) x your highest average monthly salary x service credit = your unmodified monthly benefit amount.
For help in projecting your future retirement benefit, use SCERA's online calculator or log on to MySCERA to complete your own benefit estimate.
To learn more about this calculation, attend a Retirement Planning class.
Sick leave conversion at retirement
For County Employees: If you retire directly from active status (that is your retirement date is the day after your last day in paid status) the entire balance of your accrued sick leave is converted to service credit. This increases your retirement service credit total and, therefore, increases your lifetime retirement benefit. The sick leave is not included in the years of service required for retirement eligibility, nor does it change your retirement date or age. For specific eligibility rules, please contact the Human Resources department or refer to your own MOU.
- If the age factor and service credit combine to give a member 100% of highest average salary as a benefit, the additional service credit would be of no benefit to the retiree. Therefore, the employer will pay the retiree for the accrued sick leave hours at 25% of the base hourly rate. This payoff of sick leave does not impact the retirement benefit.
- If you retire from deferred status (that is, you left SCERA-covered employment more than one day prior to your retirement) your sick leave balance will be subject to the terms of your MOU.
For employees of other agencies: Please consult your MOU or your Human Resources/Payroll liaison. As always, you can also contact SCERA.
Limits on Your Benefits
Retirement law and the IRS place limits on the amount of benefit that can be paid to SCERA retirees.
The Internal Revenue Code Section 415(b) limits the annual benefit amount that can be paid to a retiree from the retirement system. This limit is based on your age at retirement and your retirement plan (General/Safety). SCERA employers have an excess benefits plan which may pay the difference between your calculated benefit and the IRC allowable limit. For specific information on the current year limit, contact SCERA.
The Internal Revenue Code 401(a) (17) imposes limits on compensation that may be used to calculate retirement benefits for individuals who first became members of SCERA on or after July 1, 1996. The 2018 limit is $275,000. This amount may be adjusted annually by the Secretary of the Treasury.
Plan A Members
The retirement allowance for Plan A members is capped at 100% of your highest average monthly salary. Your current highest average monthly salary can be found on your Annual Statement of Benefits, or by calculating a benefit estimate using MySCERA.
Plan B Members
Pensionable compensation used to calculate the retirement benefit for a Plan B member is limited to the PEPRA limit of $121,388 for 2018. Members who participate in Social Security are capped at 100% of the PEPRA limit. Members who do not participate in Social Security (Valley of the Moon Fire Protection District employees) are capped at $145,666 (120% of the PEPRA limit).