How much is the state retirement pension?

If you are a state government employee, you may qualify to receive retirement benefits when you retire. Find out how much state retirement pension you will get.

3 min read

One of the benefits that state government employees get is the guaranteed lifetime pension benefits from the state retirement pension plan. These public pension plans provide a pension based on the employee's average salary and years of service. With income disparities across the 50 states, retired public employees benefit from cost-of-living adjustments to partially offset inflation.

At least 43 of the 50 states pay a pension benefit of at least 75% of an employee's final earnings. West Virginia is the most generous state for pension benefits with a replacement rate of 115% of final earnings, while Mississippi has the least generous benefits with a replacement rate of 54% of final earnings. In dollar value, pension benefits vary across states since each state pays different wages due to the difference in cost of living.

State Retirement Pension Benefits

The pension benefits paid to retired public employees are equal to a specified percentage of an employee’s final average salary, usually the last three to five years of employment. Eligibility for state pensions depends on the employee’s age at retirement and their years of service.

When comparing the combined state pension and social security benefits as a benefit for a full-career state government employee, at least 43 of the 50 states have a replacement rate of at least 75% of final earnings. Some of the states with the most generous benefits include West Virginia, New Mexico, Oregon, California, and Texas which had a replacement rate above 100%.

In California, CalPERS pays an average pension of $36,852 to all service retirees, beneficiaries, and survivors, while service retirees receive $39,372 per year. In Oregon, retired state employees receive an average pension of $34,480, which is slightly below the pension that California pays retired state employees. In Maine, Maine PERS pays an average retirement benefit of $20,151 per year to retired state employees.

How long must new hires work to get state pension?

State pension plans require employees to contribute towards their retirement, and employees must work a minimum number of years to qualify for benefits. Typically, employees must work many years before their retirement benefits exceed the value of their retirement contributions.

Most pension plans pay pension benefits equal to a percentage of the employee’s average salary multiplied by the completed years of service. An employee hired at age 25 must work for at least 20 or more years to receive pension payments that exceed the value of their contributions.

In California, state employees must have attained a minimum retirement age of 50 years and at least five years of credit to get a pension. The more service credits you have, the higher the benefits you will receive. The average years of service for retirees under CalPERS is more than 20 years, while the average retirement age is 58.7.

In Florida, state employees enrolled in the Florida Retirement System (FRS) after July 1, 2011, can receive full pension benefits if they are age 65 or older with at least 8 years of service, or have 33 years of service regardless of age. If you joined FRS before July 1, 2011, you can receive a full pension at age 62 with 6 years of service, or 30 years of service regardless of age.

Can you collect state pension and social security at the same time?

If you are eligible for both state pension and social security, you can receive both benefits at the same time when you retire. If you worked in a job covered by Social Security and your employer withheld Social Security taxes from your wages, the social security benefits you receive have no impact on your state pension payments.

However, if you worked for a non-covered employer who did not withhold Social Security taxes, but you did enough work in covered jobs to qualify for social security, you will receive reduced Social Security benefits based on a rule called the Windfall Elimination Provision (WEP). This provision mainly affects ex-employees of state governments and federal workers who were enrolled in the CSRS and did not transfer to the FERS plan.

If WEP applies to you, your social security payments will be calculated using a less-generous formula than the covered employees. However, the law prevents the Social Security Administration from eliminating benefits entirely or cutting them by more than half. Even with the reduction in social security, there will be no reduction in state benefits attributable to you.

What is PERS Retirement?

PER is a defined benefit plan that guarantees public employees a certain monthly income for the rest of their life. In most states, the public employee pension plans are known as Public Employee Retirement System (PERS). Typically, each of the 50 states has at least one public retirement plan for its employees.

Both the employer and the employee contribute to a PERS retirement plan, but these contributions do not determine the employee’s pension benefits. Instead, the retirement benefits paid to retired workers are based on the employee’s final salary and years of service. The plan contributions are established by statute, and they vary across the various states.