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HomeEducation CodeDiv. 1Pt. 13Ch. 27§ 24202 Retirement Allowance Calculation

§ 24202 Retirement Allowance Calculation

Education Code·California
AI Summary·Official Text·Key Terms·Related Statutes·References
AI SummaryVerified

§ 24202 Retirement Allowance Calculation

Key Takeaways

  • •If you retire after June 30, 1972, you get two parts to your retirement money: a yearly amount paid monthly and another amount based on what you put into your retirement account.
  • •The yearly amount is 2% of your final salary for each year you worked. If you retire early (before normal retirement age), this amount gets reduced by 0.5% for every month before you reach normal retirement age.
  • •The second part of your retirement money is based on how much you and your employer put into your retirement account over the years.
  • •This rule does not apply to state employees or people under the California Public Employees’ Pension Reform Act of 2013.

Example

A teacher retires at age 58 after working for 30 years. Their final salary was $60,000. They also have $100,000 in their retirement account from contributions.

The teacher gets two parts to their retirement money. First, they get 2% of their final salary ($60,000) for each year they worked (30 years). That’s $36,000 per year. But since they retired 2 years early (at 58 instead of 60), their yearly amount is reduced by 0.5% for each of those 24 months (2 years). So, their yearly amount is reduced by 12% (24 months * 0.5%), making it $31,680 per year. Second, they get the $100,000 from their retirement account, which is paid out as a monthly amount based on their life expectancy.

AI-generated — May contain errors. Not legal advice. Always verify source.

Official Source
View on CA.gov

§ 24202 Retirement Allowance Calculation

(a) A member who retires for service after June 30, 1972, shall receive a retirement allowance consisting of both of the following: (1) An annual allowance payable in monthly installments, upon retirement at normal retirement age but less than age 601/4, equal to 2 percent of the final compensation for each year of credited service. If the member’s retirement is effective at less than normal retirement age and between early retirement age and normal retirement age, the member’s allowance shall be reduced by one-half of 1 percent for each full month, or fraction of a month that will elapse until the member will attain normal retirement age. (2) An annuity that shall be the actuarial equivalent of the accumulated annuity deposit contributions standing to the credit of the member’s account at the time of retirement. (b) In computing the amounts described in subdivision (a), the age of the member on the last day of the month in which the retirement allowance begins to accrue or such later date as provided in Section 24204 shall be used. (c) The amendments to this section during the 1997–98 Regular Session of the Legislature shall not apply to state employees. (d) This section shall not apply to a member subject to the California Public Employees’ Pension Reform Act of 2013. (Amended by Stats. 2013, Ch. 559, Sec. 19. (AB 1381) Effective January 1, 2014. Deemed operative January 1, 2013, by Sec. 1 of Ch. 559.)

Last verified: January 23, 2026

Key Terms

retirement allowanceannual allowanceannuityfinal compensationcredited servicenormal retirement ageactuarial equivalent

Related Statutes

  • § 24202.5 Retirement Allowance Calculation
  • § 24202.6 Retirement Allowance Calculation
  • § 24203 30-Year Service Retirement
  • § 24203.5 Service Credit Increase
  • § 24208 Retirement Allowance Termination

References

  • Official text at leginfo.legislature.ca.gov
  • California Legislature. Education Code. Section 24202.
View Official Source