About Contribution Rates

Long-term expected contribution rates are those rates that would be realized if the Fund consistently earned a 7.5 percent rate of return annually. The long-term expected contribution rate for Article 15 is 11 percent of payroll (11.1 percent if you have elected Section 41-j, the sick leave benefit). Article 15 is the plan most Employees’ Retirement System (ERS) members are enrolled in and the plan almost all new members will be covered by. In most cases, on a long-term basis, employers should expect to pay 11 percent of their payroll to the Retirement System yearly, as long as investment results average 7.5 percent annually.

Most Police and Fire Retirement System (PFRS) employers offer employees a retirement plan that lets them retire after completing 20 years of service. The long-term expected contribution rate for these 20-year plans is approximately 20 percent of payroll (additional options, such as the one year Final Average Salary, increase your total bill). In most cases, employers who offer these 20-year plans should expect to pay 20 percent of their yearly payroll to the Retirement System, as long as investment results average 7.5 percent annually.

If the Fund averages more than 7.5 percent over an extended period of time, you should expect your contribution rate to be less than the long-term expected rate. If the Fund earns less than 7.5 percent over an extended period of time, you should expect your contribution rate to be higher than the long-term expected rate.

You can compare the long-term expected rates to the actual annual contribution rates from 1985 to present for both ERS and PFRS employers on these charts.