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  1. #1
    Join Date
    Nov 2012
    Posts
    1

    California Retirement Reciprocity Question

    I have a question for any of you retirement experts out there.

    I have 10 years (fully vested) with a city in California that has 3%@50. However, I am considering applying for another city in California that has 3%@55 and but pays quite a bit more. (Plus other personal reasons)

    The cities have an established reciprocity agreement. I checked...

    When I retire (age 33 now), will the first city pay 3% of my highest year at the second city? Or will they only pay what I earned (highest year) at the time of separation from them.

    I'm trying to decide if it makes more sense to officially retire from the first city at age 50 and start collecting on the 10 years I will have had there? Then retire from the second city at 55 years of age and collect on the 22 years there?

    Any help would be greatly appreciated,

    Thanks

  2. #2
    Join Date
    Dec 2000
    Location
    CA!
    Posts
    2,041
    Always check with PERS directly for the straight scoop. Having said that, this is my *UNDERSTANDING* of the question:

    The way it has been explained to me is you would get 3% @ 50 (likely single highest year for your current agency?) for all the time you worked (10 years in this case). So you have earned 30% of whatever your single highest year of compensation is when you retire. So if you go to your "new" 3% @ 55 agency and they pay $100,000.00 per year. You earn 30% of that for your first 10 years ($30,000). The remaining time you work with the new agency will build time under their system.

    You do *NOT* have to work to 55 to retired. The 3% @ 55 benefit still allows you to retire at 50, however you don't get the full 3% per year until you hit 55 years of age. If you go at 50, all of your 3% @ 55 time is worth 2.4% a year. So say you do 20 years as the new agency you'd get $30,000 for the time at your first (assuming $100,000 per year salary), and then 2.4% x 20 years = 48% of $100,000 for your last 20 years ($48,000). so final compensation would be $78,000 or 78% of your salary.

    For every bit of time you work over 50, your benefit increases slighly until maxing at the full 3% per year. So working till 51 gives you like 2.5% a year, 52 is 2.6% a year and so on. Ultimately you could get the full 3% a year if you stay till 55.

    Hope that helps!

    Kahuna
    Humuhumunukunukuapua'a


 

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