7-Year Employer Rate Projection

Employer contribution rates are one of the most visible outcomes of SCERS’ actuarial process. These rates determine how much each participating employer must contribute to the retirement system in addition to the amounts members pay through payroll deductions. While the annual actuarial valuation sets the official rate for the upcoming year, employers also need a longer-term view to plan responsibly. That’s where the 7-Year Employer Rate Projection comes in.

What the Projection Shows

The 7-Year Projection provides a forecast of how employer contribution rates may change over the next several years. It uses the results of the most recent actuarial valuation as a starting point, then applies assumptions about investment returns, payroll growth, and demographic experience to model future contribution needs.

The report typically includes:

  • Projected contribution rates under the baseline set of assumptions.
  • Employer rate changes for total plans under the baseline set of assumptions.
  • Graphs and tables that illustrate the potential range of outcomes over the next seven years.

Why It Matters for Employers

For participating employers, the projection is an essential budgeting tool. Pension costs are a significant part of payroll, and having an advance view of possible rate changes helps agencies plan their finances, set budgets, and make informed staffing decisions. The projection also supports transparency by showing how today’s funding decisions will ripple into the future.

Limits of the Projection

It’s important to remember that the 7-Year Projection is not a guarantee—it is a forecast based on current data and assumptions. Actual future rates will depend on many factors, including investment returns, wage growth, and changes in member demographics. For this reason, SCERS updates the projection each year after the actuarial valuation, ensuring that employers always have the most current information available.

The Bigger Picture

By publishing the 7-Year Employer Rate Projection, SCERS demonstrates its commitment to helping employers prepare for the future and manage pension costs responsibly. For members, these projections provide reassurance that SCERS and its employers are actively planning for long-term stability.