This website is intended to provide City employees and the public with more information regarding pension and retiree healthcare benefits and costs. The City’s retirement plans are administered by the Board of Trustees of each plan. For more information, please refer to the Department of Retirement Services’ website.
The City of San Jose has a defined benefit pension plan for all full-time employees and some part-time employees who previously were employed in a full-time capacity. One plan is for Police Officers and Fire Fighters called the Police and Fire Department Retirement Plan (Police and Fire). The plan for all other eligible employees is called the Federated City Employees’ Retirement System (Federated).
A defined benefit pension plan guarantees a specific benefit to eligible employees at the time of retirement. Pension benefits are calculated based on a formula that takes into account an individual employee’s highest average annual salary and years of City service. Contributions for retirement benefits are made by both the City and employees. These contribution rates are established by each board.
The contribution rates section of this website contains historical contribution rate information as well the current rates.
Both the City and employees make contributions to the City’s retirement plans. Contribution rates are the percentage of salary that each employee and the City pays. A number of factors are considered by the plans’ actuaries when determining contribution rates. For example, assumptions of mortality rates, salary increases/decreases, demographic changes, and investment gains/losses.
In March 2010, both retirement boards approved new retirement contribution rates. In both cases, the effect of changed assumptions was the most significant factor in raising contribution rates. The effect of investment loss was a much smaller factor leading to the increased contribution rates.
