DATE:
February 11, 2025
03
TO:
Board of Supervisors
SUBJECT
Title
EMPLOYER AND EMPLOYEE RETIREMENT CONTRIBUTION RATES FOR FISCAL YEAR 2025-26 (DISTRICTS: ALL)
Body
OVERVIEW
California Government Code Section 31454 requires the Board of Supervisors to adjust the rates of San Diego County's employer and employee retirement contributions based on recommendations of the San Diego County Employees Retirement Association (SDCERA) Board of Retirement (Retirement Board). The Retirement Board approved the employer and employee contribution rates recommended by its actuary, The Segal Group, Inc., for Fiscal Year (FY) 2025-26 on November 21, 2024.
While the employer contribution rates are different for Safety and General members, the aggregate employer rate (or weighted average rate) approved by the Retirement Board for FY 2025-26 is 48.16% of payroll, which is a decrease from the FY 2024-25 aggregate employer rate of 50.17%. The decrease in the employer contribution rate results most significantly from the effect of amortizing the retirement fund's Unfunded Actuarial Accrued Liability (UAAL) over a larger than expected projected total payroll. Since the County's projected total payroll increased significantly over the past year, the average recommended employer contribution percentage decreases even while the projected employer contribution amount in dollars increases.
The average employee (i.e. member) rate as a percentage of payroll decreased from 11.92% to 11.58%, primarily due to changes in active member demographics among retirement tiers.
Approval of today's recommendation would adopt employer and employee retirement contribution rates for inclusion in the Chief Administrative Officer Recommended Operational Plan (i.e. budget) for FY 2025-26.
RECOMMENDATION
SAN DIEGO COUNTY EMPLOYEES RETIREMENT ASSOCIATION BOARD OF RETIREMENT and CHIEF ADMINISTRATIVE OFFICER
Adopt the San Diego County employer and employee retirement contribution rates for FY 2025-...
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