Pension Checks

Faculty members who are considering retirement often have questions about the financial consequences. For many faculty, the results of comparing net professorial pay and net pension income are surprisingly favorable. The At Your Service Online retirement benefits calculator provides information that is automatically tailored to your individual profile.   

Below you will find some general notes, followed by three illustrative scenarios comparing faculty paychecks with pension income. 

General notes:

  • Basic retirement income is based on age at retirement, years of service credit, and Highest Average Plan Compensation (HAPC), which is the average of the highest three consecutive years of base-building compensation (for faculty members, usually their nine-month salary). 
  • For most faculty members who are currently considering retirement, the age factor used to determine the retiree pension is at the maximum once they reach 60.
  • The years of service factor reaches the maximum at 40 years of service.
  • With maximum age factor and maximum service credit, most faculty members who retire can receive 100% of their HAPC each month (before tax or other withholding).
  • Once faculty members retire, their monthly checks are no longer subject to withholding for contributions to Social Security or the UC Retirement Program.
  • Regular cost-of-living adjustments to retirement income help to keep the retirement option an attractive one.  In recent years, the annual adjustment has generally been around 2%.

Paychecks vs. pension checks:

Here are three illustrative scenarios created by tax and retirement specialists at the UC Office of the President comparing net professorial pay and net pension income.