Contribution rates to decrease slightly July 1

Beginning July 1, the start of a new fiscal year, contribution rates for the ASRS Defined Benefit Plan paid by members and employers will decrease, albeit nominally.

The total contribution rate (which includes contributions for the pension plan, health insurance supplement and long term disability) to be paid by members and employers will be 11.47 percent each, down from the current rate of 11.60 percent.

The decrease is due primarily to strong investment market performance last year, when the ASRS experienced a net return of 18.6 percent on its total fund of more than $34 billion.

This return places the ASRS in the top fifth percentile among large U.S. public funds over the past year, and the top fourth and second percentiles over the past three and five years, respectively. The strong returns are due to a combination of large strategic allocation to U.S. equities, which produced strong gains, combined with tactical over-weights to these markets and to opportunistic credit markets.

“We continue to outperform with our investments, and we are working diligently to be in the position to provide for a benefit increase to our retirees,” Mr. Matson said. “Ensuring a solid pension plan for our members, reducing contributions, and working toward being able to provide for a PBI to our retirees in the future are primary goals of our Board and Investment Committee and our investment team and consultants, all of whom are focused on adding additional value to our fund beyond traditional industry benchmarks.”

Past PBIs will continue to be paid to retirees and although no additional PBI is available this year, continued returns above the ASRS earnings rate of 8 percent over the next few years could lead to a modest future PBI.

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