How your Hanford PD pension works
Your CalPERS pension is your years of service, times a benefit factor set by your age when you retire, times your final compensation. Whether you are classic or PEPRA decides the factor and how final compensation is figured, and that depends on when you were first hired into CalPERS.
At a glance
- Pension = years of service x benefit factor x final compensation.
- Classic members are on 3% at 55. PEPRA members, first hired on or after January 1, 2013, are on 2.7% at 57.
- What you pay in comes out pre-tax. The pension you collect is taxable, federal and California.
- Your CalPERS statement names your formula. Check it once a year.
Who this is for: A Hanford PD officer, a year in or twenty years in, who wants to know what the pension will pay and what decides it.
Reviewed by Theron Morgan, CEO and founder, Avidity Capital Inc., a registered investment adviser, on 2026-10-07.
Three numbers make the pension
Service credit is how many years you have worked under CalPERS. A full year on the job is a year of credit.
The benefit factor is the percent of pay you earn for each year of service. It is set by your formula and by your age on the day you retire, and it rises in steps each quarter year until it reaches the full factor.
Final compensation is your pay averaged over a set period. Multiply the three together and you have the unmodified allowance: the most the pension pays you each month, before any survivor option, taxes or health premiums.
Classic or PEPRA: decided by when you joined
The MOU puts classic members on 3% at 55 and members first hired on or after January 1, 2013 on 2.7% at 57. PEPRA is the state pension reform law that created the second formula.
Hire date is not the whole test. If you were already a member of CalPERS or a reciprocal California system before that date and moved to Hanford without a long break, you may keep classic. CalPERS decides, and your annual statement shows which formula you are on.
The two formulas differ in more than the factor. CalPERS sets a maximum for this formula. If your career runs past about 28 years, check your myCalPERS estimate for the exact figure. The PEPRA chart prints no maximum. PEPRA members also have final compensation figured as the average of their highest-paid 36 consecutive months, and a yearly cap on the pay that counts toward the pension: $191,679 for 2026 for members who are not in Social Security, which includes Hanford PD officers.
What you pay in, and how the pension is taxed
Classic members pay 9% of pay toward the pension. PEPRA members pay half the normal cost of their own benefit, 14.5%. Either way it comes out before income tax, so it lowers your taxable wages.
In retirement, the pension is taxable income for federal and California tax. Plan for withholding from the first check, the same way you plan for it on a paycheck.
Survivor protection before and after you retire
While you are still working, the 1959 Survivor Benefit is the City's coverage for your family if you die before you retire. The MOU sets it at the fourth level. It pays a monthly benefit to eligible survivors, such as a spouse or registered domestic partner caring for your children, and the rules on who qualifies are CalPERS's.
At retirement you make a separate choice: take the unmodified allowance, or a lower monthly amount that keeps paying a beneficiary after you die. That choice cannot be undone later in most cases, and it is the single biggest money decision at the end of a career. Your CalPERS retirement estimate shows what each option pays.
A registered domestic partner is treated like a spouse for CalPERS survivor benefits. An unmarried partner who is not registered is not an eligible survivor for the 1959 Survivor Benefit or the pre-retirement spouse benefits, even after many years together. If that describes your household, register the partnership with the California Secretary of State or name your partner on purpose where CalPERS allows it, and do it before it matters.
Social Security: not on this job
Hanford PD officers are not in Social Security for this job. The pay stub shows federal, Medicare and state withholding, with no Social Security deduction, and the pension takes the place of Social Security for this work.
If you have other jobs, now or in the past, check those pay stubs: a Social Security or OASDI deduction means that job pays into Social Security. Two rules used to cut those benefits for people with a pension from work outside Social Security: the Windfall Elimination Provision and the Government Pension Offset. The Social Security Fairness Act repealed both. Your Social Security statement at ssa.gov shows what you have earned.
What the app does
The Retirement tab projects your pension from the formula you confirm and the service and pay you enter. It asks for your formula instead of guessing, and myCalPERS stays the official source. The survivor scenario shows what your household keeps if you die first, with and without a survivor option.
Questions people ask
Am I classic or PEPRA?
Your CalPERS annual statement and myCalPERS name your formula. As a rule, members first hired into CalPERS on or after January 1, 2013 are PEPRA, unless they were already members of CalPERS or a reciprocal system and moved without a long break.
What counts as final compensation?
Your pay averaged over a set period. For PEPRA members it is the highest-paid 36 consecutive months, up to a yearly cap of $191,679 for 2026 for Hanford PD officers. For classic members the period is set by the City's contract with CalPERS; your statement shows it.
Is the pension taxed?
Yes. It is taxable income for federal and California tax. What you paid in came out pre-tax, so the tax is due when the pension is paid.
Can my unmarried partner get my survivor benefits?
Not as a spouse unless you register the domestic partnership with the California Secretary of State. A registered domestic partner is treated like a spouse for CalPERS survivor benefits.
Does the Social Security Fairness Act mean I pay into Social Security?
No. Hanford PD officers do not pay into Social Security on this job. The law changed how Social Security benefits earned at other jobs are figured for people with a pension like yours.
Next step
See your own numbers first. The free reality-check needs no account and no card.
This page is education, not individualized investment, tax, legal or insurance advice. It names no products, funds or allocations and carries no client stories. Where a document or a policy is needed, an estate attorney or a licensed insurance agent is the person who prepares it. Avidity Capital Inc. drafts no legal documents and receives no commission or referral fee from insurance, estate attorneys, mortgage lenders or real estate agents. Its compensation is the member's subscription and, for members who choose it, an advisory fee for managing assets; see Form CRS and Form ADV Part 2A. Avidity Capital Inc. is a registered investment adviser.