His Pension Stopped Counting His Salary at $159,733. The Coworker Beside Him Got Credit Up to $191,679.

Two California public employees with nearly identical salaries faced a $31,946 discrepancy in their pension statements. One worker coordinated with Social Security, while the other did not, resulting in different pension calculation caps set by California's PEPRA law. The Social Security-participating employee's pension stops recognizing compensation above $159,733 in 2026, while the non-Social Security employee's ceiling is $191,679.

The employee with the lower cap may feel shortchanged, but his salary still reaches $180,000 if he earns that amount. The cap applies only to the CalPERS retirement calculation, not to the employee's actual earnings. For the Social Security-covered employee, compensation above $159,733 can still contribute to Social Security, but it stops building CalPERS pension benefits.

A 457(b), 403(b) or individual retirement account (IRA) can help supplement these pension-invisible dollars. It is crucial for PEPRA members to confirm their pension cap and plan accordingly for a secure retirement.