In providing retirement benefits to employees, among an employer's most significant obligations are to withhold employee contributions and forward them to SERS as well as to budget for and pay employer contributions to the pension system.
One number is often used to refer to the employee contribution rate and one number is used for the employer contribution rate. Often, the "short-hand" employee rate referenced is the one that applies to the majority of SERS members and the employer rate referenced is a composite of all then-current rates. In reality, each class of service has a specific employee and a specific employer contribution rate.
Employee Contribution Rates
Employer Contribution Rates
Employer contribution rates are certified by the SERS Board annually, typically in April of each year to become effective the following fiscal year beginning in June.
It is customary for rates to result from an independent actuarial valuation of the pension fund. 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 cases, however, the actuarially calculated employer contribution rate has been set or adjusted by Pennsylvania law.