Contribution Rates Remain Constant for 2017-2018 School Year

At the October 24, 2016 Public School and Education Employee Retirement Systems of Missouri (PSRS/PEERS) Board of Trustees' meeting, the Board voted to maintain the current contribution rates for the 2017-2018 school year. This action was based on the recommendation of the Systems' actuary, PricewaterhouseCoopers (PwC).

2017-2018 PSRS Contribution Rates
Employee Rate Employer Rate Combined Rate
14.5% 14.5% 29%
2017-2018 PEERS Contribution Rates
Employee Rate Employer Rate Combined Rate
6.86% 6.86% 13.72%

Trustees have the important fiduciary responsibility to set contribution rates to adequately fund the Systems. Rates are recommended annually by the Systems' actuaries, and by law cannot increase more than 1% per year for PSRS members, and .5% per year for PEERS members. PSRS active members and employers each currently contribute 14.5% of salary, while PEERS active members and employers contribute 6.86%.

PSRS/PEERS is primarily funded by investment earnings, but also through the contributions made by you and your employers.

system funding as a percentage per dollar
Note: The Member amount shown above is slightly higher than the employer amount because it includes funds paid by members to purchase service and reinstatements as well as their contributions.

While PSRS/PEERS was able to keep contribution rates steady for the 2017-2018 school year, the need for future rate increases will heavily depend on investment performance. Investment earnings provide 61 cents of every dollar paid, so they are important in the funding design of the plans. Low investment returns or interest rates could result in contribution rate increases and have a negative impact on the pre-funded status in future years.

According to PwC, PSRS is 84.8% prefunded and PEERS is 86.4% prefunded. Both are considered financially healthy.

About Your PSRS/PEERS Contributions

PSRS/PEERS contributions are automatically deducted from your pay and are credited to your individual membership. You do not pay taxes on your contributions until you receive them back from PSRS/PEERS as monthly benefits or a lump-sum payment.

Your contributions are always returned to you in the form of monthly benefits, or a lump-sum payment to your or your beneficiaries.

For specific information regarding the contributions you have made to PSRS/PEERS during your membership, log in to view your membership information at PSRS/PEERS Web Member Services, or refer to your annual Member Statement, which will be mailed to you in November.