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Looking ahead: Contribution rate changes coming in summer and fall 2021

August 18, 2020

Member and employer contribution rates for Washington’s retirement systems are established every two years. Rates for most of the retirement plans are approved by the Washington State Pension Funding Council; rates for Plan 2 of the Law Enforcement Officers’ and Fire Fighters’ (LEOFF) Retirement System Plan 2 are approved by the LEOFF Plan 2 Retirement Board.

Rates are reviewed and approved in even-numbered years so they can be incorporated into the state’s next two-year budget cycle beginning July 1 of odd-numbered years. The state Legislature has the authority to revise the approved rates as part of the budget adoption process, but is not required to do so.

2021-2023 Contribution Rates

Below is a list of rates as adopted by the PFC in July 2020, and the LEOFF Plan 2 Retirement Board in August 2020. Please note that approved rates are unofficial until the 2021-23 state general fund biennial budget has been approved by the 2021 Legislature and signed by the governor.

MEMBER CONTRIBUTION RATES
 Sept. 2020Effective July 1, 2021Effective Sept. 1, 2021
Public Employees’ Retirement System (PERS) Plan 27.90%6.36%
Law Enforcement Officers’ and Fire Fighters’ Retirement System (LEOFF) Plan 10.000.00
Law Enforcement Officers’ and Fire Fighters’ Retirement System (LEOFF) Plan 28.59%8.53%
Washington State Patrol Retirement System (WSPRS) Plans 1/28.61%8.61%
Public Safety Employees’ Retirement System (PSERS) Plan 27.20%6.50%
Teachers’ Retirement System (TRS) Plan 27.77%8.05%
School Employees’ Retirement System (SERS) Plan 28.25%7.76%
TRS 1 and PERS 1 member contribution rates are fixed in statute at 6%   
EMPLOYER CONTRIBUTION RATES (Employer rates include 0.18% DRS administrative expense rate)
 Sept. 2020Effective July 1, 2021Effective Sept. 1, 2021
Public Employees’ Retirement System (PERS)12.97%10.25%
Law Enforcement Officers’ and Fire Fighters’ (LEOFF) Retirement System Plan 10.18%0.18%
Law Enforcement Officers’ and Fire Fighters’ (LEOFF) Retirement System Plan 2   
  • LEOFF 2 Cities, Counties, Fire Districts –
    Employer Contribution Rate
5.33%5.30%
  • LEOFF 2 Cities, Counties, Fire Districts –
    State Contribution Rate
3.44%3.41%
  • LEOFF 2 Ports and Universities –
    Employer Contribution Rate
8.77%8.71%
Washington State Patrol Retirement System (WSPRS)17.84%17.84%
Public Safety Employees’ Retirement System (PSERS)12.25%10.39%
Teachers’ Retirement System (TRS)15.74%14.42%
School Employees’ Retirement System (SERS)13.30%11.65%

The PFC rate adoption motion attributes changes in contribution rates to updated economic assumptions, including salary growth, inflation adjustments and a reduction in the expected rate of return on investments. In addition, rates reflect the final step of a six-year phase-in of assumptions about longevity. People are living longer now and are expected to live even longer in the future. This leads to more retirement benefit payments over time, which in turn requires higher contribution rates now to maintain the health of the pension trust funds in the future.

Contribution rates for the defined benefit systems are set every two years based on analysis and recommendations from the State Actuary. The Actuary regularly recommends updates to assumptions so policymakers can adjust contribution rates as needed to fund the retirement benefits earned by members.

The Pension Funding Council has more information.

Beneficiary Designation

Members, you can update your beneficiary information from your online retirement account. Select “My Account” in the navigation menu and then “View/Edit” beside “Beneficiary.”

(If you prefer to fill out and mail in a printed form, select this link.)