The main factors for the changes in fringe benefit rates between years are summarized below:

SERS Regular Retirement: The cost pool for SERS Regular retirement will be about 7.8 percent higher in FY 2021 compared to the current year. The increase is due to a higher pension contribution based on the new actuarial valuation, especially for unfunded pension liability, and higher retiree health insurance costs. At the same time, the salary base for SERS Regular retirement is projected to grow by less than one percent next year.

SERS Hazardous Duty: The SERS Hazardous Duty (HD) rate is significantly lower largely due to the new actuarial valuation. Unfunded pension liability is distributed to SERS regular versus HD based on total pension liability for active employees by plan. Since a higher proportion of HD employees retired in recent years, more unfunded liability has shifted from HD to SERS regular in the fringe benefit rate calculation. Overall, the HD cost pool decreased by 11 percent, while salaries are projected to rise by about 1.5 percent in FY 2021.

Alternative Retirement Program (ARP): The ARP retirement rate is slightly higher in FY 2021 compared with the prior year, mostly due to an increase in retiree health costs. Partly due to the SAG award transfers, the cost pool for ARP is projected to decline about 7 percent in FY 2021, while the projected salary base for ARP is anticipated to decrease by about 8.4 percent.

Judges Retirement: The Judges’ retirement rate will increase significantly in FY 2021. The cost pool is up by 11.8 percent, while salaries are projected to be 2.4 percent lower next year. The main cost driver is unfunded liability associated with the new actuarial valuation.

Teachers’ Retirement: The growth in the Teacher’s Retirement rate is primarily due to an increased pension contribution for FY 2021. Overall, the cost pool for retirement is growing faster than the projected salary base for employees in the Teacher’s plan.