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Contribution Rates Set for Next Year

Contribution rates for the Defined Benefit Plan for fiscal year 2014-15, which take effect July 1, 2014, will increase slightly from current rates. In the meantime, the funded status of the ASRS plan improved slightly, and is on a positive path for the future.

The contribution rates effective July 1, 2014 will be:

 

Fiscal 2014-15

July 1, 2014 – June 30, 2015

 

Retirement Pension & Health Insurance Benefit

Long Term Disability Income Plan

Total

Employee

11.48%

0.12%

11.60%

Employer

11.48%

0.12%

11.60%

 

The current rates are 11.30% for the Pension Plan and 0.24% for LTD, for a total current contribution rate of 11.54% for employees and employers, which will remain in effect through June 30, 2014.

The slight increase in pension plan rates is due to continued efforts to pay off the unfunded liability and continued recognition of market losses in 2008 and 2009. New actuarial assumptions will be implemented that change the timeframe for paying off the deficit from a 30-year rolling period to a 30-year fixed timeframe for the pension plan, and to 15-year fixed periods for the health insurance benefit and LTD fund. This more conservative assumption will help to pay off the deficit sooner and improve the plan’s funded status.

The funded status for the ASRS for the year ended June 30, 2013 is 75.9%, compared with the previous fiscal-year end status of 75.7%. A plan is generally considered in sound territory when the ratio is 80% or above.

Separately, the Long Term Disability plan’s funded status is 85.7%, and the Health Insurance Benefit funded status is 89.2%.

“We continue on a path of improved financial status for our plans,” ASRS Executive Director Paul Matson said. “We are constantly balancing our approach to investments and reviewing our plan structure to ensure we continue to have a sound plan for the near and long term for our members.”

The contribution rate for the Long Term Disability Plan was reduced by half due to improved financial standing of the LTD fund because of lower usage of the program.

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