Depending on where you are in your life, you might be thinking about where you will be at the end of the day or at the end of your career. When planning your retirement options, we want to make sure we offer a variety of plans.
We are part of the California Public Employees' Retirement System (CalPERS). Instead of participating in Social Security, CalOptima employees contribute a percentage of their pre-tax earnings to their CalPERS account. CalOptima contributes the same percentage of the employee’s regular earnings into this account. This is a defined benefit retirement plan in which the retirement benefit is based on the employee's years of service, final/highest compensation, and age at retirement. Regular, full-time employees become vested in the plan after five years of service.
We also offer a Defined Contribution Supplemental Retirement Plan through the Public Agency Retirement System (PARS), a 401(a) tax-qualified multiple employer trust. CalOptima contributes to this on each employee’s behalf. All contributions are automatically invested in a life-cycle mutual fund based on your current age and is managed by John Hancock Retirement Services. These life-cycle funds are professionally managed investments that automatically adjust to become more conservative over time as you approach your retirement date. If you wish to manage your own investments, you have the ability to select among 20 different mutual funds representing different investment sectors.
A voluntary 457 Deferred Compensation Plan is also offered. Section 457 plans are available to public agencies and are similar to 401(k) plans in the private sector. The employee determines the amount of pay they wish to contribute, via payroll deductions, on a pre-tax basis. The employee determines from a selection of options how their money will be invested. The plan is portable, so it may be “rolled over” to most other retirement plans.