Common Questions: Alternate Contribution Rate

Did you know the Alternate Contribution Rate (ACR) applies to all ASRS retirees who return to work for an ASRS employer? This is true regardless of early or normal retirement status and the number of hours worked in a pay period. It also means a return-to-work retiree’s 20/20 employment status does not matter.

An ACR applies regardless of whether the retiree is employed directly, through a leasing or contracting arrangement, or has satisfied the 12-month break in service without working in a leased or contract arrangement. In essence, employers are required to pay an ACR unless the retired member suspends their ASRS pension and resumes active ASRS membership. 

A critical point: The ASRS employer is required to pay the ACR, and this cost cannot be passed to the retired member in the form of a deduction from their pay.

Why is the ACR needed in the first place?

The purpose of the Alternate Contribution Rate, which legislation approved and first implemented July 1st, 2012, is to help mitigate the potential actuarial impact that retired members who return to ASRS employment may have on the ASRS Trust Fund. In other words, it’s to help mitigate the potential negative financial impact of hiring retired, non-contribution employees to occupy positions that otherwise would be filled by contributing members with matching employer contributions.   

For more information, we encourage you to review our resources on the Employer Reference Materials page, including the ACR Guide and your Employer Manual.

Was this page helpful?: 
No votes yet