Among the most significant employee retirement benefit duties of a SERS-participating employer is withholding employee contributions and budgeting for employer contributions, and forwarding both of them to SERS.
While the most often referenced employee rate is one that applies to the majority of SERS members and the most often referenced employer rate is a composite of all then-current rates, there are specific employee and employer rates for each class of service in the system as detailed in the following charts:
FY 2024/25 Employee & Employer Rate Chart by Class of Service
FY 2023/24 Employee & Employer Rate Chart by Class of Service
FY 2022/23 Employee & Employer Rate Chart by Class of Service
FY 2021/22 Employee & Employer Rate Chart by Class of Service
FY 2020/21 Employee & Employer Rate Chart by Class of Service
FY 2019/20 Employee & Employer Rate Chart by Class of Service
Employee contribution rates are set by the State Employees' Retirement Code and are largely determined by the employee’s class of service.
The rates are generally fixed with the notable exception of the shared-risk/shared-gain provisions that apply to most employees who entered SERS membership since 1/1/11. If SERS’ investments perform more than 1% above or below the assumed rate of return over several years, the employee rate could increase or decrease as follows:
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For most employees who entered SERS membership between 1/1/11 and 12/31/18 and most employees who entered hazardous duty law enforcement or security positions after 12/31/18 (A-3 and A-4 classes of service), the rate may change by 0.5% over a period and by no more than 2% overall. |
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For most employees who entered SERS membership on or after 1/1/19 (A-5 and A-6 classes of service), the rate may change by 0.75% over a period and by no more than 3% overall. |
The review is a two-step process: the first is to consider if investments performed more than 1% above or below the assumed rate of return during the measurement period. If so, the second step determines the actual impact of the investment gains or losses on the employer contribution rate for the following three fiscal years.
By law, the last shared-risk/shared-gain review was conducted in 2023 and considered investment performance in:
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2013 – 2022 for most employees who entered SERS membership between 1/1/11 and 12/31/18 and most employees who entered hazardous duty law enforcement or security positions after 12/31/18 (A-3 and A-4 classes of service). The first step of the calculation resulted in no need to complete the second step. |
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2020 – 2022 for most employees who entered SERS membership since 1/1/2019, when the new A-5 and A-6 classes opened to new members. The first step of the calculation resulted in a requirement to conduct the second calculation for the following three fiscal years. The second calculation resulted in no increase for fiscal years 2023-24 and 2024-25. We fully expect that an increase of less than 0.75% will be effective for fiscal year 2025-26; however, we will not know the exact amount of the increase until April 2025. |
The SERS Board certifies the employer contribution rates each year, typically in April, to become effective the following fiscal year beginning in July.
It is customary for rates to result from an independent actuarial valuation of the pension system. The valuation assesses the pension system's current funds and determines its future expected liabilities. The employer contribution rate is set so that it can fund all retirement benefits earned by employees working during the year and pay toward any unfunded liability that may exist.
In some years, however, the actuarially calculated employer contribution rate has been changed by Pennsylvania law.