California has two massive public pension systems. If you're a government employee approaching retirement, you need to know which one you're in and how it works. The number of people who don't fully understand their own pension system is surprisingly high. Let's fix that.
Who's Who
State employees, local government workers, firefighters, police officers, and some school district employees who are not certificated teachers.
Certificated teachers, administrators, counselors, and other K–12 and community college educators.
Some people have time in both systems. If that's you, the coordination between the two matters — pay extra attention.
Side-by-Side Comparison
CalPERS vs. CalSTRS Feature Comparison
The Big Differences That Matter Most
Healthcare
This is huge. CalPERS members can keep their CalPERS health coverage in retirement (at their own cost). CalSTRS members don't have this option — they need to arrange their own coverage through a district retiree plan, Medicare, or the marketplace. If you're a teacher, build healthcare costs into your retirement budget from day one.
Social Security
CalPERS members generally participate in Social Security and can claim benefits normally. CalSTRS members typically do not pay into Social Security on their teaching income. If you have SS credits from other employment, your benefit may be reduced by the Windfall Elimination Provision (WEP). Your spouse's SS benefit may be affected by the Government Pension Offset (GPO). These rules changed in 2024 — verify your current situation.
Supplemental Savings
Both systems have supplemental plans to help you save beyond your pension. CalPERS offers a 457(b) plan. CalSTRS offers the Pension2 program with 403(b) and 457(b) options. If you're not using these, you're leaving tax benefits on the table.
If You Have Time in Both Systems
Some educators start as classified staff (CalPERS) and then move to certificated positions (CalSTRS), or vice versa. You can keep credits in both systems, but they don't combine for benefit calculations. You'll get separate pension payments from each — which can work in your favor, or create complexity around coordination rules.
Your pension is one of the most valuable assets you'll ever have. Understanding exactly how it's calculated — and what it doesn't cover — is the foundation of your entire retirement plan. If you want to walk through your specific situation, I work with public employees across Orange County and know these systems well.
Johnny Hong has helped hundreds of Orange County families retire with confidence. A focused 30-minute conversation can help you see your next best move clearly.