What Every Employer Should Know

Overview

What Every Employer Should Know

As a participating employer, you pay your share of the annual cost of your employees’ future benefits.

The Retirement System’s actuary must ensure that adequate assets are being accumulated to pay benefits as they become due. To do that, the actuary makes assumptions about factors such as employee mortality, turnover, expected investment returns, salary growth and even inflation. These assumptions are regularly reviewed and adjusted, if necessary, based on the System’s actual experience.

Every August, we provide you with an estimated invoice of your annual contributions for the current State fiscal year (April 1 – March 31). Every November, we provide your actual annual invoice.

Costs are based on the retirement plans you offer and your employee demographics. These costs are calculated based on actual salaries from the most recently completed fiscal year.

Annual contribution rates also play a major role in the total amount of your annual payment. The value of the Common Retirement Fund (Fund) and the rate of return on our investments have a significant impact on the rates.

The value of the Fund for the most recently completed fiscal year and other factors are used to determine the employer contribution rates for two fiscal years in the future. Rates are issued in late August/early September every year and are used to calculate the invoice due February 1 of the following State fiscal year. For example, rates based on the value of the Fund as of April 1, 2022 were issued in September 2022 and are for the invoice due February 1, 2024.

Rates for annual payment due February 1, 2023:

Rates for annual payment due February 1, 2024:

The following pages will help you gain a more complete understanding of how contribution rates are established and of the relationship between those rates and investment returns.

 


Rev. 9/22