The Public School Employees’s Retirement System (PSERS) board on Friday set the employer contribution rate, which is shared by school districts and the state, at 12.36 percent of a district’ss payroll. That is up from this year’ss 8.65 percent rate. The new rate is expected to generate $1.8 billion for the pension system.
Dramatic as the increase seems, it comes as no surprise to school district officials. A 2010 state law, known as Act 120, capped the annual increases for several years to smooth out the anticipated spike in pension obligations that were coming next year to help districts plan for this large bill.
“If Act 120 was not in effect the employer rate would have jumpled up to 29.65 percent next year, rather than 12.36 percent,” said PSERS Executive Director Jeffrey Clay.
Source: Patriot-News, Dec. 11. 2011 — By Jan Murphy.