LEOFF 2 Board Adopts Supplemental Rate Increase

At their meeting on July 25, 2007, the LEOFF 2 Board adopted a supplemental contribution rate increase due to legislation passed in 2007, as required by law. The rate increase of .04% for LEOFF 2 members and .02% for LEOFF 2 employers is effective September 1, 2007.

In the June Legislative Bulletin, we reported that the expected increase was .03% for employees and .02% for employers, but the State Actuary increased the member rate slightly.

Below are the contribution rates for all plans as of September 1, 2007. We will update our full contribution rate chart once we have the revised rates and rate projections for July 2008 and beyond.

Pension Contribution Rates, Effective September 1, 2007

Member

Employer**

PERS 1

6.00%

6.13%

PERS 2

4.15%

6.13%

PSERS

6.57%

8.55%

LEOFF 1

0.00%

0.16%

LEOFF 2

8.64%

5.35%

** Employer rates include a .16% DRS administrative expense rate (reduced from the prior rate of .18%). The PERS 3 employer rate is the same as the PERS 1 & 2 rates.

Select Committee on Pension Policy

The Select Committee on Pension Policy last met on August 14. The agenda included a review of economic assumptions used in the pension rate setting process. The preliminary recommendation from the State Actuary is to lower the expected rate of investment earnings. If this recommendation is advanced and accepted by the various policy groups it will result in future rate increase. Pension rates are on the rise and this will simply add to the increases. We will continue to keep you informed of future rate projections.

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