Contribution Stabilization Program

Definitions

Contribution Stabilization Program

Normal Rates

Employer contribution rates for each retirement plan are determined annually by NYSLRS’ Actuary and approved by the Comptroller. The Actuary determines the present value of current and future retirement benefits based on the actuarial assumptions recommended in the Annual Report to the Comptroller on Actuarial Assumptions. The present value of benefits is then compared to the value of the Common Retirement Fund’s assets. The difference between these two amounts is spread over the future working lifetimes of active members to determine annual contribution rates.

Normal Annual Contribution

The normal contribution is an employer’s total bill, excluding payments for group term life insurance, deficiencies, previous amortizations, incentive costs and prior years’ adjustments.

Retirement System’s Average Rates

The System average rate represents the average normal contribution rate over all retirement plans in each system for a given fiscal year. It is calculated by dividing the total normal contributions by the total billable salary from all participating employers in a system for the fiscal year.

Employer’s Average Rate

Each employer has their own specific average rate. It is calculated by dividing an employer’s normal contribution by that employer’s salaries.

Retirement System’s Graded Rates

Graded rates for the Employees’ Retirement System (ERS) and Police and Fire Retirement System (PFRS) are determined following the procedures established by the Contribution Stabilization Program.

Each year, the System graded rate will increase or decrease by up to 1 percent depending on the gap between the increase or decrease in the System average rate and the previous graded rate. Graded rates are calculated based on a System average rate that does not include employer group term life insurance (GTLI) owed that fiscal year.

Employer’s Graded Rate

Each employer has their own specific graded rate. It is calculated by multiplying the Retirement System graded rate by a ratio of the employer’s average rate to the System average rate. The average rate ratio is capped at 100 percent so the employer’s graded rate cannot exceed the System graded rate.

Graded Contribution

The annual contribution to the Retirement System is based on the graded rates established by the Contribution Stabilization Program, which are tailored to the tier and plan demographics of each employer.

 


Rev. 8/22