New projections could mean good news – and savings – for CERS-participating employers
Employers in the County Employees Retirement System (CERS) could see contribution rates level off, then decline in the near future, according to Kentucky Public Pensions Authority (KPPA) Executive Director David Eager.
Eager testified before the Public Pension Oversight Board (PPOB) in Frankfort on Tuesday, noting that the employer contribution rate for non-hazardous CERS participants will likely decrease slightly from the current rate of 26.95 percent to 26.93 percent in fiscal year 2023. The decrease would be the first drop in employer contribution rates in several years.
Legislation passed in 2018 froze the amount that CERS contribution rates could increase year over year at 12 percent until 2028. However, that does not mean that the rates must increase by 12 percent – only that it can’t suddenly spike up by more than 12 percent.
The contribution rate for CERS Non-hazardous has increased every year since fiscal year 2016, when the rate was 17.06 percent, but it is projected that the rate will start falling next year and continue a slow decline over the next several decades.
“We’ve got good news – it’s going down in fiscal year 23,” said Eager. “It’s going to come down gradually, but we are seeing a 2.5 to 3 or 4 percent decline on the contribution rates in most cases.” Eager said that CERS Hazardous is an exception but should see improvements in fiscal year 2024.