Updated October 7, 2026. Quick answer: A member of the Sacramento County Employees’ Retirement System (SCERS) picks a payment option on the retirement application: the Unmodified option with a 60% continuance, Option 1 with no survivor benefit, Option 2 with 100%, Option 3 with 50%, or a custom Option 4. Once retirement is effective the choice cannot be changed, even if the beneficiary dies first. A member who leaves before retiring either withdraws contributions plus credited interest, which forfeits all service credit and any future SCERS benefit, or leaves them on deposit as a deferred member. SCERS publishes no reduction percentages for the options.
What this page covers and what it does not
This page works from fifteen pages on the official website of the Sacramento County Employees’ Retirement System (scers.gov), read on October 7, 2026. The pages carry no edition date and no plan document was among them, so each statement is tied to a web page, not to the governing law. Figures are either on a SCERS page or labeled as computed examples from assumed inputs. SCERS sorts members by category (Miscellaneous or Safety) and by benefit tier, and several rules differ by tier, so the tier on a member’s own record decides which rule applies. State taxes are covered on California retirement taxes and does California tax pensions, and the system-by-system view is public pension retirement decisions by system.
The election: five choices and one permanent decision
When a member retires, SCERS asks for a payment option. Its page says: “This is a one-time, irrevocable decision that determines how your monthly benefit is paid”. “Once your retirement is effective, your option cannot be changed, even if your beneficiary passes away.” The table sets out the options using the wording of the SCERS pages.
| Option | What the member receives | What happens after the member’s death |
|---|---|---|
| Unmodified | The highest monthly benefit SCERS can pay | A 60% lifetime continuance to an eligible spouse or registered domestic partner; otherwise minor children collectively; otherwise remaining member contributions as a lump sum to the designated beneficiary |
| Option 1, Refund | Slightly reduced compared to the Unmodified Option | No monthly survivor benefit; remaining member contributions, if any, go to the beneficiary |
| Option 2, 100% continuance | Reduced to account for the continuing benefit | 100% of the monthly benefit for the rest of the beneficiary’s life |
| Option 3, 50% continuance | Reduced to account for the continuing benefit | 50% of the monthly benefit |
| Option 4, Custom or Special | Set by actuarial approval | Depends on the arrangement |
The pages give no dollar or percentage reduction for any option. For the general trade between a single pension and a survivor pension, see single-life versus joint-and-survivor pension and survivor benefit with a government pension.
Who the survivor is, and what shrinks the benefit
The Unmodified option pays the most. The survivor test is a status test: “A 60% lifetime continuance is paid to your eligible spouse or registered domestic partner, to whom you were married/registered for at least one year prior to retirement.” A spouse of less than a year at retirement is outside the continuance. SCERS adds: “If no eligible spouse or partner, minor children may collectively receive the 60% continuance until the minor child(ren) reaches age 18 (or reaches age 22 if regularly enrolled as a full-time student) or marries, whichever comes first.”
Options 2 and 3 name one beneficiary. SCERS says: “Only one person may be named to receive a continuance under Option 2 or 3.” Also: “Your beneficiary must have an insurable interest in your life (typically a spouse or dependent).” One rule is easy to miss: “If your beneficiary dies before you, your benefit amount does not increase and any newly designated beneficiary only receives a payment of your remaining member contributions, if any, upon your death.” The election does not follow the member’s circumstances after retirement.
The size of the reduction depends on the beneficiary. “Options that include continuance benefits generally reduce your monthly benefit to account for the added liability to the system.” On the beneficiary’s age, SCERS says “Your beneficiary’s age affects the amount of your reduction for Options 2 and 3”: “the younger the beneficiary, the greater the reduction.” The pages read give no table of the gap for a spouse of a given age, so the estimator is the source.
A computed example from an assumed $3,000 monthly Unmodified benefit, not a SCERS figure: a 60% continuance would be 60% of $3,000, a computed $1,800 a month for an eligible spouse. The real amount would come from the formula and the member’s record. On who picks Option 1, SCERS says: “Most often selected by members with no financial dependents or who do not wish to provide continuing income”.
The Temporary Annuity feature
One feature changes the shape of the pension over time. SCERS says it “may provide a temporary increase in your SCERS benefit before age 62, followed by a permanent reduction after age 62”. The page warns: “The reduction after age 62 is permanent, regardless of when or whether you claim Social Security.” On eligibility: “PEPRA members are not eligible for the Temporary Annuity Option.”
When to apply and when the election is final
The window to apply is short. “You may submit your retirement application no more than 60 days before your intended retirement date.” “Your retirement becomes effective the date you request, but no earlier than the day after your last day on payroll.” “SCERS cannot process retroactive retirements or begin benefits before your application is received.”
A change is possible for a while. “Contact SCERS to change or withdraw your application any time before your retirement becomes effective.” “Once your retirement date passes, your election becomes irrevocable.” On paper applications, SCERS says: “We cannot accept the application via Email.”
The first payment has two stated timelines. One page says: “Your first retirement benefit will typically be issued within 45 days of your retirement date.” Another says: “While SCERS strives to issue the initial benefit payment within 30-45 days of terminating employment, this timeline can be extended during peak retirement months (usually, the first quarter of the calendar year).”
How the pension is built
The pages read describe a monthly lifetime benefit and do not describe a partial lump sum at retirement or a deferred retirement option program. The formula: “Age Factor × Years of Service Credit × Final Compensation”. SCERS says the benefit is “based on a formula”, not an account balance.
| Membership category | Benefit tier | Maximum benefit factor at age |
|---|---|---|
| Miscellaneous | Tiers 1, 2 and 3 | 62+ |
| Miscellaneous | Tier 4 | 65+ |
| Safety | Tiers 1 and 2 | 50+ |
| Safety | Tier 3 | 55+ |
The age factor values themselves are not published on the pages read. Final compensation comes from a short window: “For Tier 1 members, SCERS averages the most recent consecutive 12 months of pension-eligible compensation earned.” “For members in all other benefit tiers, SCERS averages the most recent consecutive 36 months of pension-eligible compensation earned.”
A computed recheck of a SCERS example: a Tier 1 member paid $960 biweekly for eight months and $880 biweekly for the four months before that. Multiplying each biweekly rate by 26, dividing by 12 and averaging the twelve months gives a computed $2,022 a month, matching the $2,022 on the page. The page’s Tier 2 example, 24 months at $880 and 12 months at $840, rechecks to a computed $1,878 a month over 36 months, matching its $1,878.
Leaving before retirement: withdraw or leave it on deposit
A member who leaves covered employment before retiring has two paths. The first is to withdraw contributions. SCERS describes it this way: “Receive a refund of your personal contributions, plus any credited interest”. The cost is stated plainly: “Forfeit all service credit and any future SCERS benefit”. The refund excludes the employer’s share: SCERS says: “Employer contributions are not included”. There is a waiting rule: “you must be separated from all SCERS Participating Employers for at least 60 days before withdrawing your contributions”. A return is not clean: “You cannot return to SCERS-covered employment and keep the refund.” “You would have to redeposit the refunded contributions and any interest that has accrued to regain the lost service credit.”
The other path keeps the membership. SCERS lists these features of leaving the money in: “Retain your SCERS membership”; “Continue earning interest on your contributions”; and “Keep your service credit and benefit tier”. The default favors staying: “If you do not respond, your account remains on deposit by default.” SCERS says “until you retire or withdraw, your deferred status is preserved. You can request a withdrawal at any time.” “However, once a withdrawal is processed, it cannot be undone.” See also pension refund versus leaving it.
Vesting decides whether a deferred benefit exists. “You’ve earned 5 years of full-time service credit” “You are also vested if you reach age 70, or qualify through reciprocity” Retirement from deferred status then follows tier rules. For Miscellaneous Tiers 1 to 4, one test is “Age 50 or older with 5 years of eligible service and 10 years of contributions on deposit”.
How a refund is paid, and what the IRS adds
A withdrawal is paid in one of two forms. As a check to the member: “If you are under age 59 1/2, and elect a lump sum payment, you may be subject to tax or additional early withdrawal penalties.” “SCERS is required to withhold taxes from your lump sum distribution.” As a rollover: “Pre-tax contributions may be rolled over into an eligible retirement account, such as an IRA or another employer’s eligible retirement plan.” “Keep in mind that a distribution of amounts contributed to SCERS on a pre-tax basis will be subject to tax withholding.”
A computed example from an assumed $4,000 taxable refund paid directly, not a SCERS figure: the mandatory 20% federal withholding the IRS describes below would be a computed $800, leaving a computed $3,200 in cash. Rolling over the full $4,000 would mean finding the withheld $800 elsewhere. See also 20% withholding on a pension lump sum.
What the IRS adds on tax
A refund or lump sum from a public pension is a distribution, so the IRS rules apply on top of SCERS’s own. On withholding, the IRS says that a taxable eligible rollover distribution paid to you “is subject to mandatory income tax withholding (generally at a rate of 20%), even if you intend to roll it over later”, and that if you roll it over yourself “you’ll have to add funds from other sources equal to the amount withheld”. SCERS describes both a direct payment and a direct rollover. The rollover clock, if the money is paid to you: “you have 60 days from the date you receive it to roll it over to another eligible retirement plan”.
On early distributions the IRS says “the law imposes a 10% additional tax on certain early distributions from certain retirement plans”. Its list of exceptions includes “Distributions made to you after you separated from service with your employer after attainment of age 55” and “Distributions made to a qualified public safety employee from a governmental plan” if the employee separated from service during or after the year they attained age 50 or 25 years of service under the plan, whichever is earlier. Whether an exception fits a particular refund depends on your own plan and facts, so confirm it with a tax preparer before you take one.
Interest on contributions
“SCERS credits interest semi-annually, on June 30 and December 31, to member account balances that have been on deposit for the entire six months immediately prior to the interest crediting date.” The rate rule on the interest page is “the lesser of 1) the United States 5-Year Treasury Note Rate on the last publishing date of the interest crediting period; or 2) the interest crediting rate applied to the Employer and Retiree Reserves”. The latest entries in its table are 2.095% for 6/30/2026 and 1.865% for 12/31/2025.
Buying or restoring service credit
Service credit is a multiplier in the formula, so buying more can raise the pension. A member who withdrew can restore credit: “you can redeposit the withdrawn amount, plus interest, to restore your original service credit upon becoming a member of SCERS again.” “Some purchased service may not count toward vesting or retirement eligibility, but it may increase your benefit amount.” On cost: “Costs are calculated using actuarial methods and depend on your pay, service history, and the type of purchase.”
The route to a price is the estimate: “To calculate a Service Purchase Estimate, use the online Service Purchase Calculator in your MySCERS member account.” The pages read publish no price schedule, so a break-even has to come from that estimate. A computed example from assumed figures, not SCERS figures: if a purchase cost $24,000 and raised the monthly pension by $200, the recovery period would be $24,000 divided by $200, a computed 120 months of payments. See the pension buyback calculator.
Cost-of-living adjustments
SCERS pensions carry a cost-of-living adjustment with a ceiling that depends on tier. “The retiree cost-of-living adjustment (COLA) is based on the average annual change in the U.S. Department of Labor, Bureau of Labor Statistics Consumer Price Index (CPI) for All Urban Consumers in the San Francisco-Oakland-Hayward area.”
| Category and tier | COLA ceiling as SCERS states it |
|---|---|
| Miscellaneous Tier 1 | Up to 4% |
| Miscellaneous Tier 2 | No COLA |
| Miscellaneous Tiers 3, 4 and 5 | Up to 2% |
| Safety Tier 1 | Up to 4% |
| Safety Tiers 2, 3 and 4 | Up to 2% |
A computed example from an assumed $3,000 monthly benefit under a 2% ceiling, not a SCERS figure: one 2% COLA brings it to a computed $3,060, and two in a row compound to a computed $3,121.20, consistent with SCERS’ statement: “The COLA provision amounts compound annually and isn’t based on a flat rate each year or a minimum.”
Taxes, beneficiaries and death before retirement
On tax, SCERS says “SCERS retirement benefits are considered taxable income.” “Most retirees choose to withhold federal and/or state taxes from their monthly payments, but withholding is optional.”
Beneficiary paperwork has consequences. “SCERS does not automatically update your beneficiary when you get married. A new form must be submitted.” On divorce, SCERS says “If you fail to update your beneficiary after divorce, your former spouse may remain eligible to receive death benefits”. If a member dies before retiring, the benefit depends on status. The basic benefit is “Available if you are not vested and your death is not job-related”, and the alternative benefit is “Available if you are vested and your death is not job-related”. The pages read do not say how these benefits apply to a deferred member who has left covered employment.
What this page could not settle
- The pages read do not state any percentage or dollar reduction for Options 1, 2 or 3, only that the benefit is reduced and that a younger beneficiary means a larger reduction for Options 2 and 3.
- The pages read do not describe a partial lump sum at retirement or a deferred retirement option program, and do not state the age factor values or the size of the Temporary Annuity adjustments.
- The member contributions page describes the interest crediting rate as the lower of half the 5-year Treasury rate or half the rate applied to valuation reserves, while the interest page states the lesser of the Treasury rate or the reserves rate without halving. The pages read do not reconcile the two.
- The estimating page says the final compensation period is 12 or 36 months depending on tier, while the payment options page says only Tier 1 uses 12 months.
- The COLA bank tables contain entries that look inconsistent (a 225% value, overlapping date ranges, and a heading dated April 1, 2025 on the second table), so their figures are not used.
- Two pages give different timelines for the first payment (within 45 days of the retirement date, and 30 to 45 days of terminating employment), and the pages read do not say which governs.
- The pages read do not state the cost of any service purchase or how a deferred member’s death benefit works, and no edition date or plan document accompanied them, so confirm any consequential rule with SCERS.
Common mistakes
- Choosing a payment option as if it can be revisited; SCERS says the choice is permanent once retirement is effective, even if the beneficiary passes away first.
- Withdrawing contributions without weighing what is lost: all service credit and any future SCERS benefit are forfeited.
- Skipping a beneficiary update after marriage or divorce; SCERS does not update it automatically.
Related on this site: pension refund versus leaving it, single-life versus joint-and-survivor pension, pension buyback calculator, 20% withholding on a pension lump sum, pension lump sum versus monthly annuity break-even, survivor benefit with a government pension, California retirement taxes, does California tax pensions and public pension retirement decisions by system.
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Answer againSources
- Sacramento County Employees’ Retirement System, Payment Options and Final Compensation (scers.gov, read October 7, 2026): https://www.scers.gov/active-members/planning-for-retirement/payment-options-and-final-compensation/
- Sacramento County Employees’ Retirement System, Retirement Eligibility and Timing (scers.gov, read October 7, 2026): https://www.scers.gov/active-members/planning-for-retirement/retirement-eligibility-and-timing/
- Sacramento County Employees’ Retirement System, Applying for Retirement (scers.gov, read October 7, 2026): https://www.scers.gov/active-members/planning-for-retirement/applying-for-retirement/
- Sacramento County Employees’ Retirement System, Estimating Your Retirement Benefit (scers.gov, read October 7, 2026): https://www.scers.gov/active-members/planning-for-retirement/estimating-your-retirement-benefit/
- Sacramento County Employees’ Retirement System, Leaving SCERS-Covered Employment (scers.gov, read October 7, 2026): https://www.scers.gov/active-members/employment-life-changes/leaving-scers-covered-employment/
- Sacramento County Employees’ Retirement System, Member Contributions (scers.gov, read October 7, 2026): https://www.scers.gov/active-members/contributions-service-credit/member-contributions/
- Sacramento County Employees’ Retirement System, Member Interest Crediting Rates (scers.gov, read October 7, 2026): https://www.scers.gov/active-members/contributions-service-credit/member-interest-crediting-rates/
- Sacramento County Employees’ Retirement System, Purchasing or Restoring Service Credit (scers.gov, read October 7, 2026): https://www.scers.gov/active-members/contributions-service-credit/purchasing-or-restoring-service-credit-2/
- Sacramento County Employees’ Retirement System, Leaving Employment and Deferring Benefits (scers.gov, read October 7, 2026): https://www.scers.gov/deferred-members/leaving-employment-and-deferring-benefits/
- Sacramento County Employees’ Retirement System, Applying for Retirement from Deferred Status (scers.gov, read October 7, 2026): https://www.scers.gov/deferred-members/applying-for-retirement-from-deferred-status/
- Sacramento County Employees’ Retirement System, What Benefits Are Payable? (scers.gov, read October 7, 2026): https://www.scers.gov/active-members/death-before-retirement/what-benefits-are-payable/
- Sacramento County Employees’ Retirement System, Cost-of-Living Adjustments (COLAs) (scers.gov, read October 7, 2026): https://www.scers.gov/retired-members-beneficiaries/cost-of-living-adjustments-colas/
- Sacramento County Employees’ Retirement System, Taxes and Withholding (scers.gov, read October 7, 2026): https://www.scers.gov/retired-members-beneficiaries/taxes-and-withholding/
- Sacramento County Employees’ Retirement System, Marriage, Divorce, and Family Changes (scers.gov, read October 7, 2026): https://www.scers.gov/active-members/life-events-for-active-members/marriage-divorce-and-family-changes/
- Sacramento County Employees’ Retirement System, Receiving Your Retirement Benefit (scers.gov, read October 7, 2026): https://www.scers.gov/retired-members-beneficiaries/receiving-your-retirement-benefit/
- IRS, Topic no. 413, Rollovers from retirement plans (irs.gov): https://www.irs.gov/taxtopics/tc413
- IRS, Topic no. 558, Additional tax on early distributions from retirement plans other than IRAs (irs.gov): https://www.irs.gov/taxtopics/tc558
Sources: the primary documents linked above, read on October 7, 2026. General information from each system’s own published materials, not legal, tax or financial advice. Your own member statement and the system’s current rules decide your benefit, and a pension counsellor at the system or a fee-only adviser is the right place to confirm anything consequential.