Subject: DRS Email 12-006, Proposed Contribution Rate Changes for...

  • Notice No.: 12-006
  • Date: April 18, 2012
  • Applies to: All Employers
  • Subject: DRS Email 12-006, Proposed Contribution Rate Changes for PERS, PSERS, and SERS
PROPOSED NEW EMPLOYER PENSION CONTRIBUTION RATES EFFECTIVE APRIL 1, 2012

New contribution rates were included in the supplemental budget legislation passed by the legislature during the recently completed special session. Included in the legislation are employer contribution rate changes for PERS, PSERS and SERS that would lower the rates in these systems effective April 1, 2012. Please note that the new rates do not take effect until the Governor signs the budget legislation, the current rates apply until the legislation is signed. Attached is a table of the proposed April 1st rates. Only those systems and plans that have a change in their rates are listed. The proposed rate changes are employer rate changes only. Member rates are not changed as part of this legislation.

Why was there an employer contribution rate change effective April 1?

The rate reductions were enacted to reconcile a difference in the biennial budget passed in 2011 between the amount appropriated to state agencies to pay employer contribution rates and the amount collected by DRS. The lowered rates for the remainder of the fiscal year provide necessary relief to agencies already addressing significant cuts in funding.

Additional employer contribution rate changes in July and September.

Also included in the supplemental budget legislation are additional employer pension contribution rates changes scheduled for July 1st and September 1st. The legislation proposes new employer rates for PERS and PSERS effective July 1st and new rates for TRS and SERS effective September 1st.

What action should employers take now?

The legislation does not take effect until the bill is signed, so no action is required by employers at this time. When the Governor signs the bill DRS will send a notice confirming the rate changes. Employers may wish to prepare in advance for prompt implementation of the April 1st rate changes once they are confirmed.

What if I have already reported April compensation to DRS when the new rates take effect?

No action on the part of the employer is required. DRS will identify April compensation previously reported to DRS and apply the new rates. Most employers who previously reported April compensation will receive a credit on their account as a result of the application of the new rates. Your account manager in the DRS Accounts Receivable Unit will contact you about how to use the credit applied to your account.

Contribution Rates Effective April 1, 2012
(Employer rates include 0.16% DRS administrative expense rate)
  Plan 1 Plan 2
Public Employees’ Retirement System (PERS) Percent Rate Percent Rate
Employer Contribution Rate 7.08% 0.0708 7.08%* 0.0708*
PERS State Government Elected Officials Percent Rate Percent Rate
Employer Contribution Rate 10.54% 0.1054 7.08%* 0.0708*
PERS JBM State Agencies – Supreme Court Justices, Appeals and Superior Court Judges Percent Rate Percent Rate
Employer Contribution Rate 9.58% 0.0958 9.58%* 0.0958*
PERS JBM Counties & Cities – District Court Judges & Municipal Court Judges Percent Rate Percent Rate
Employer Contribution Rate 7.08% 0.0708 7.08%* 0.0708*
Public Safety Employees’ Retirement System (PSERS) Percent Rate Percent Rate
Employer Contribution Rate NA NA 8.74% 0.0874
School Employees’ Retirement System (SERS) Percent Rate Percent Rate
Employer Contribution Rate NA NA 7.58%* 0.0758*

*Employer rates for Plan 3 are the same as for Plan 2.

Questions?

If you have any questions regarding this DRS Notice, please contact Employer Support Services at (360) 664-7200, option 2, or 1-800-547-6657, option 6, option 2; or email us.

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