Working for a public or governmental agency can be a steady job with security and benefits. One advantage at some organizations in California is the Public Employees Retirement System, also known as CalPERS, which is the biggest pension system in the country. In addition to lifetime retirement benefits, CalPERS offers home loans, investments and health benefits to some negotiated groups. Although you cannot borrow from the money in your retirement account, you may be able to transfer it to a new job, depending on the employer.
CalPERS is a retirement program for employees who work at certain public agencies, such as country offices and schools. It allows you to start collecting benefits at the age of 50 with at least five years of credit for service worked. If you work at least 20 hours a week, you are usually required to join the CalPERS system. Your contribution is 7 percent of your pre-tax income. Once you retire you will receive all of the money that you paid into the system -- plus your employer's contribution -- within six months to 10 years, depending on your choice. In addition, you also will receive your monthly retirement benefit for the rest of your life.
Transfer to CalPERS Job
If you have accumulated CalPERS service credit and leave your job, you can transfer it, but only if you take a job with another CalPERS employer. Not all public agencies in California use the same retirement system, so this may be a deciding factor in accepting a position. If you take a job with another CalPERS agency, you will not be allowed to withdraw your funds. However, your service will continue and you will be given credit toward retirement as though you had not switched jobs.
Transfer to Non-CalPERS Job
If you take a job with a company that is not enrolled in the CalPERS system, you may keep your contributions with CalPERS and earn interest. Also, if you have at least five years of service you can collect retirement benefits at age 50 or older. The amount will be based only on the amount of time that you spent with a CalPERS employer. Alternatively, you may withdraw the funds in your account. However, you can face severe financial penalties if you do so. You may withdraw only the portion that you contributed, and 20 percent in federal income taxes may be taken out of the amount, in addition to 12.5 percent in excise taxes. These penalties can be avoided if you roll your account over into an IRS-approved individual retirement account (IRA).
Some agencies outside of the system have reciprocity agreements with CalPERS. Although you cannot continue service credit with one of these employers, you are able to retire from your reciprocal employer and the CalPERS system at the same time if you contribute to your new employer's system for at least five years. Your retirement pay level will be a calculated based on your highest pay for both employers.