What Every Employer Should Know

Long-Term Expected Contribution Rates

What Every Employer Should Know

Long-term expected contribution rates are the rates that would be realized if the Fund consistently earned a 5.9 percent rate of return annually.1 On a long-term basis, employers should expect to pay these rates as a percentage of their payroll to NYSLRS each year.

Most Employees’ Retirement System (ERS) members are enrolled in the Article 15 retirement plan. New members are enrolled in Tier 6, which began April 1, 2012. The Tier 6 Article 15 long-term expected contribution rate is 9.9 percent of payroll (10.0 percent if you have elected Section 41(j), the sick leave benefit).1

Most Police and Fire Retirement System (PFRS) employers offer their employees the 384-e retirement plan, which allows members to retire after completing 20 years of service. The long-term expected contribution rate for the Tier 6 384-e contributory plan is 19.0 percent of payroll.1

If the Fund averages more than 5.9 percent over an extended period of time, employers should expect their contribution rate to be less than the long-term expected rate. If the Fund earns less than 5.9 percent over an extended period of time, employers should expect their contribution rate to be higher than the long-term expected rate.1

You can compare the long-term expected rates to the actual annual contribution rates from 2000 to 2022 for both ERS and PFRS employers on these charts. Please note, the historical chart shows Tier 4 rates rather than Tier 6 rates because Tier 6 rates only go back until 2012.

 

Line Graph Comparing the ERS Employer Contribution Rate History — Long-Term Rates versus Actual Rates
Description of ERS Employer Contribution Rate History (2000–2022) line graph

This chart shows the long-term expected rates and the actual annual contribution rates for ERS Tier 4 (Article 15). You can see that, beginning in Fiscal Year 2011 through the current Fiscal Year 2021, the actual rates are higher than the long-term expected rates. This will be the case in Fiscal Year 2022 as well.

 

 

Line Graph Comparing the PFRS Employer Contribution Rate History — Long-Term Rates versus Actual Rates
Description of PFRS Employer Contribution Rate History (2000–2022) line graph

This chart shows the long-term expected rates and the actual annual contribution rates for PFRS Tier 2 (384-e). You can see that from Fiscal Year 2012 to the current Fiscal Year 2021, the actual rates are higher than the long-term expected rates. This will be the case in Fiscal Year 2022 as well.

 

The average employer contribution rates for fiscal year ended March 31, 2021 are 14.6 percent of payroll in ERS, and 24.4 percent of payroll in PFRS. This is a slight increase of 0.9 percentage points for PFRS.

The average employer contribution rates for fiscal year ended March 31, 2022 will increase from 14.6 percent to 16.2 percent of payroll for the Employees’ Retirement System (ERS) and from 24.4 percent to 28.3 percent of payroll for the Police and Fire Retirement System (PFRS).

 


Rev. 10/20

1Updated 9/21