What Every Employer Should Know

The Big Picture

What Every Employer Should Know

The Retirement and Social Security Law (RSSL) establishes the benefits for members and the benefit options employers can choose for their employees. NYSLRS administers those benefits. The RSSL also establishes the overall methodology used to make sure we have assets available to pay for those benefits. Generally, choosing to offer your employees better retirement plans or benefit options results in a higher annual cost.

Rates and the Common Retirement Fund

The value of the Common Retirement Fund (Fund) and the rate of return on our investments directly affect annual contribution rates.

The Fund’s assets come from three main sources of incoming funds: employee or member contributions, investment income and employer contributions. From April 1, 2000 through March 31, 2020, 68 percent of the cost of pensions was paid by the Fund’s investment returns.*


Pie Chart Representing the Sources of Incoming Funds
Description of Sources of Incoming Funds pie chart

Employee contributions, employer contributions and investment income are the three sources of the Common Retirement Fund’s assets. This pie chart shows that from April 1, 2000 through March 31, 2020, employee (member) contributions have amounted to $5.7 billion, or 2% of the growth of the Fund’s assets. Employer contributions over this same period totaled $68 billion, or 29% of the growth of the Fund’s assets. But it’s been investment income which has comprised the largest chunk — $161 billion, or 68% of the growth of the Fund’s assets over this span.


Each year, we evaluate the Fund’s assets and compare the value of those assets to the funds needed to pay current and future benefits. The difference between these two amounts is spread over the future working lifetimes of active members to determine annual contribution rates.

The return on the Fund’s investments over time affects the annual contribution rates. When the Fund’s investments earn a larger than expected return, the annual contribution rates normally decrease. Conversely, when the rate of return falls short of projections, the contribution rates normally increase. (We assume a 5.9 percent annual rate of return on our investments.1) NYSLRS’ Actuary is responsible for determining the contribution rates each year, which must be approved by the Comptroller.


*Approximately $166 billion was paid in benefits over the 20-year period from April 1, 2000 through March 31, 2020.


Rev. 10/20

1Updated 9/21