Asking for a Friend: I’m a California state worker, and RTO doesn’t work for me. What should I know about my pension before leaving?
First, you should know that you’re not the only one weighing their next steps. For parents, caregivers, people with disabilities, neurodivergent individuals, or anyone who found remote work life-changing, Governor Newsom’s RTO order can feel like a major setback. While only you can decide what’s right for your life, here’s what you need to know about your CalPERS pension before making a big career move.
Understand the impact on your CalPERS pension
Service Credit Stops If You Leave: Once you leave state service, you stop accruing service credit toward your pension. This can significantly affect your retirement benefit, so consider this carefully.
Vesting Matters: If you have at least five years of CalPERS service credit (or ten years if you’re a State Second Tier member), you’re vested. This means you’re entitled to a pension in the future, even if you leave before you’re eligible to retire.
Your contribution options when leaving state service
Leave Contributions on Deposit: Regardless of if you’re vested or not, you can leave your contributions with CalPERS, which preserves your right to later collect a pension in your retirement. You will earn interest on these contributions while they remain in your account.
Withdraw Your Contributions: If you withdraw (refund) your contributions, you end your CalPERS membership and forfeit your pension eligibility. If you later return to CalPERS-covered employment, you would have to buy back your service credit. This cost is typically higher than the amount refunded and increases over time due to interest.
Thinking of working for another public agency?
Reciprocity Can Help: If you move to another reciprocal California public agency, your prior service may help you meet eligibility requirements for retiring from both systems. The rules are specific, so check with CalPERS and your new employer before making the move.
Why careful planning matters
Leaving your CalPERS-covered job is a major decision with long-term financial consequences. Make sure you’re doing it for the right reasons, with the right plan in place for your future. It’s about making sure you’re in control of your choice, not the other way around.
Thinking about leaving your CalPERS job? Let’s look at the whole picture.
Your pension is just one piece of your financial life. I help clients understand how career moves affect everything with a dollar sign attached - from taxes and insurance to investments, estate plans, and of course, retirement.
This isn’t just about leaving a job, it’s about building the future you want.
Let’s build that plan together.
Disclaimer: This information is for educational purposes only and doesn't constitute financial advice. Consider consulting with a fee-only financial planner for personalized guidance.
