Employer contribution rates to SCERS will decrease next year as the pension fund continues to strengthen, based on an actuarial analysis being presented to the Board of Retirement on December 10.

The reduction will mark the fourth year in a row of lower pension contributions due to larger-than-expected investment gains. The pension fund beat its investment target of 6.75% this past fiscal year, finishing with a 10.8% investment return.

At its December meeting, the SCERS Board of Retirement will review the actuarial valuation and adopt contribution rates for the next fiscal year that begins July 1, 2026. The agenda materials can be found here. The Board meeting begins at 10 a.m. and will be live streamed from the quick link at scers.gov.

The aggregate employer contribution rate will decrease by 1% of payroll to 27.52% for the 2026-27 fiscal year. Employee contribution rates will remain relatively stable, decreasing on average by 0.05% in 2026-27. The specific rates vary by employer and retirement tier.

Overall, the long-term funding outlook for SCERS improved; SCERS ended the 2024-25 fiscal year with a funded status of 93.5%, an increase from the prior year’s 88.7%. The fund balance was $14.6 billion as of June 30, 2025, and has continued to grow to more than $15 billion today.

The funded status is the ratio of pension assets to liabilities. It represents a “temperature check” on how the pension fund is performing at a point in time and guides SCERS’ actuaries on how to adjust contribution rates to ensure the funding is sufficient over the long term to support the benefit obligations. SCERS targets a 100% funded status over a 20-year period and is on pace to achieve that goal.

SCERS provides pension benefits to more than 33,000 employees, retirees, and beneficiaries.