Every January 1, employer contribution rates in the State and Local Government Divisions are adjusted to include a Defined Contribution (DC) Supplement. This annual adjustment is the result of a provision included in Senate Bill 18-200.

The DC Supplement represents the employer contribution amount paid to the PERA DC Plan participant accounts for members who began PERA membership on or after January 1, 2019, that would have otherwise gone to the Defined Benefit (DB) Plan trusts. The DC Supplement is deposited into PERA’s DB Plan trusts to pay down the unfunded liability. 

The amount of the contribution rate increase will be determined annually on a division-by-division basis (i.e., the State Division DC supplemental contribution may be different than the Local Government Division DC supplemental contribution in any given year) and is assessed to all employers in these divisions regardless of whether an agency had any new employees elect to participate in the DC Plan. 

The contribution rate increase will not be considered a base employer contribution for the purposes of employer contributions to the DC Plan, which means it does not go into the member’s DC Plan account, but rather goes directly to pay off the unfunded liability in the DB Plan, similar to the AED and SAED. 

Effective for all payroll periods ending on or after January 1, 2024, the DC Supplement contribution rate for employers in the State Division increases from 0.17% to 0.21%. The total employer contribution rate will increase from 21.57% to 21.61%.

Effective for all payroll periods ending on or after January 1, 2024, the DC Supplement contribution rate for employers in the Local Government Division increases from 0.06% to 0.08%. The total employer contribution rate will increase from 14.76% to 14.78%. 

For more information, please refer to the Employer Contribution Rates page on our website.