On July 1, 2024, the ASRS will begin a new fiscal year – FY 2024-25. For members, this is when new contribution rates go into effect. Starting July 1, 2024, the new total contribution rate will be 12.27%, a slight decrease from the FY 2023-24 rate of 12.29%.
Understanding Your Contribution Rate
The total contribution rate paid by both ASRS members and employers is comprised of two parts: contributions collected pre-tax to fund both the pension and health insurance benefits, and a fractional percentage of contributions collected post-tax to fund the long term disability benefit.
For FY 2024-25, the pre-tax Pension and Health Insurance contribution rate is 12.12%, while the post-tax Long Term Disability Income Plan contribution rate is 0.15%. These two pieces combine to create your new total contribution rate of 12.27%.
How Rates Are Determined, Where They’re Going
Contribution rates are determined each year through an actuarial valuation conducted by an external actuary. The actuary performs a deeper analysis called an experience study every four or five years. In these experience studies, actuarial assumptions of the ASRS are evaluated, along with how those assumptions may or may not need to adjust going forward, and what effect those adjustments in assumptions may have on contribution rates over the next 30 years.
A question most members have is what the contribution rate will be going forward. To this point, one of our primary tenets is to provide stability for members and avoid large year-to-year swings in the contribution rate. Based on current projections, we’re optimistic that contribution rates will remain stable for the foreseeable future, likely staying within ± 1% of the current total rate for the next 10+ years.
By Allison Holland, ASRS Member Advocate
Published 6/13/2024
