The passage of Senate Bill 18-200 on June 4, 2018, introduced the Defined Contribution (DC) Supplement. Beginning January 1, 2021, and every year after, employer contribution rates in the State and Local Government Divisions will be adjusted to include a Defined Contribution (DC) Supplement. 

This 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) trusts. The DC Supplement is deposited into PERA’s DB 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 (i.e. does not go into the member’s DC account, but rather goes directly to pay off unfunded liability in the DB Plan. Similar to AED/SAED). 

Effective for all payroll periods ending on or after January 1, 2023, the Defined Contribution (DC) Supplement contribution rate for employers in the State Division increases from 0.10% to 0.17%. This brings the total employer rate from 21.50% to 21.57%.

Effective for all payroll periods ending on or after January 1, 2023, the Defined Contribution (DC) Supplement contribution rate for employers in the Local Government Division increases from 0.03% to 0.06%. This brings the total employer rate 14.73% to 14.76%. 

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