New Plan G and Safety C Contribution Rates Effective July 1
On May 7, 2024, the Board of Supervisors adopted changes to contribution rates for LACERA plan sponsors and active General Plan G and Safety Plan C members, as recommended by LACERA in accordance with Government Code Section 31454. LACERA’s Board of Investments approved these new contribution rates on December 13, 2023.
Your contribution rate is a percentage of your compensation, paid semimonthly through automatic payroll deductions. General Plan G and Safety Plan C contribution rates are flat-rate percentages for all members and are structured for 50/50 cost-sharing (see more below). On July 1, the rates will change as follows.
- General Plan G: from 9.24 to 9.28 percent
- Safety Plan C: from 14.76 to 14.97 percent
Visit your plan’s contributions rate page, linked above, for examples of how the rate change will affect your pay. Your updated rate will also be reflected on your My LACERA dashboard after it goes into effect.
How Your Contributions Fuel the Pension Fund
LACERA's retirement fund relies on three sources of funding: employer contributions, employee contributions, and investment earnings on those contributions. Historically, investment earnings have accounted for about three-quarters of the money necessary to pay the promised benefits.
Contribution rates are based on actuarial methods and assumptions that project the retirement system’s ability to pay for future benefits. In general, when the assumed rate of interest return goes up, contribution rates go down; conversely, when the assumed rate of interest is lowered, contribution rates go up. See How Rates Are Set for additional details.
50/50 Cost-Sharing
General Plan G and Safety Plan C, also known as PEPRA plans, were created to address requirements of the Public Employees' Pension Reform Act of 2013 (PEPRA). Rates for these plans are adjusted annually to meet the PEPRA requirement of 50/50 cost-sharing between the employee and employer.
The cost referred to under 50/50 cost-sharing is the retirement system’s normal cost, which is the cost to pay for the pension benefits earned in the current year. In determining 50/50 cost-sharing, the actuaries determine the total amount of contributions needed in a year to fund the benefits accrued in that year.
That cost is split evenly between employer and employee. Contribution rates in 50/50 cost-sharing plans are based on a flat rate; members of each respective plan pay the same contribution rate, regardless of their entry ages. Rate negotiations between the employer and employee groups are not permitted under PEPRA.