Contribution Stabilization Program


The Contribution Stabilization Program is an optional program that establishes a graded contribution rate system. If you elect to participate, it enables you to pay a portion of your annual contribution over time, leading to smoother, more predictable pension costs. This option was first available in fiscal year 2011.

Participating in the Program

If you did not elect to participate in a previous fiscal year, you can opt into the program now or in the future. You must complete the Employer Contribution Stabilization Program (CSP) election form available on the “How to Pay” page of our Employer Invoices application and submit it with your payment. You will still have the option to prepay your annual contribution by December 15. (Please note: municipalities cannot issue bonds on their own to pay the State in one lump sum. The law enacting the CSP did not contain legislative authorization for employers to issue bonds. Specific statutory authority is required.)

Once you elect to participate and amortize, you cannot withdraw from the program. However, you do not have to amortize each year and you can choose to amortize less than the maximum amount allowed. You can prepay amortized amounts without penalty.

Maximum Amortization Amounts

Your projection, which is available 17 months in advance of the invoice due date, will show an estimated maximum amortization amount. Your estimate will show the final maximum amortization amount. The estimate of your payment due February 1, 2020, which was available in August 2019, will show the 2020 maximum amortization amount.

Graded Payments

If future contribution rates are less than the graded rate, employers who participate in the program will be required to pay the graded rate. The excess payments (the difference between the employer’s normal contribution and the employer’s graded rate) will first be applied to pay amortized amounts.

If all amortized amounts have been paid, any additional contributions will be deposited in a reserve fund and used to offset future rate increases. Payments into the reserve account continue until such time as the payments deposited in the fund equal the employer’s total salary base.

Amortizations are paid over a ten-year period at an interest rate comparable to taxable fixed income investments of a similar duration. The interest rate for amounts amortized in fiscal year 2020 is 2.55 percent.

The Fund

Under this program, no money is taken from the Fund. The Fund currently holds 22 percent of its assets in fixed income. For employers who participate, interest on their obligations will be charged at a rate that approximates a market rate of return on taxable fixed rate securities of a comparable duration. In other words, the Fund will receive the same return on the obligation as it would have if the employer had made a normal, ungraded payment.

In addition, the calculation of future employer contribution rates and the System’s funded ratio are not affected.

For More Information

This presentation will tell you what you need to know before deciding whether the option is right for you. If you have questions or need additional information after reading this presentation, please email Employer Services or contact our Billing Unit at 518-473-0681 or 518-474-3140.


(Rev. 2/20)