The NYSTRS Board recently adopted an Employer Contribution Rate (ECR) of 9.80% applicable to 2017-18 school year salaries, marking a return to single digits for the first time in six years.
The 2017-18 ECR is a reflection of the continued strength of the System’s five-year rate of return on investments. Although figures are not yet final, NYSTRS' five-year average return as of June 30, 2017 will exceed the 7.5% assumed annual rate of return. The new five-year average will also outpace the 8.3% average as of June 30, 2016.
For schools and the taxpayers that fund them, a lower ECR means a decrease in required contributions paid to NYSTRS, freeing up funds for other uses. Collectively, the System’s approximately 820 participating employers will contribute $1 billion less to NYSTRS in fall 2018 than in fall 2015.
The ECR is the percentage of member payroll employers contribute to NYSTRS. This rate is determined annually through an actuarial valuation of NYSTRS' assets and liabilities. These contributions have been collected without fail throughout the System's history, keeping NYSTRS among the best-funded and most secure plans in the country.
The 9.80% ECR for 2017-18 represents a decrease of approximately 16% from the rate that will be applied to 2016-17 salaries and collected this fall. It will be the third consecutive year that the rate has declined.
A continuing downward trend in the ECR is not assured, however. While investment returns for the fiscal year ended June 30, 2017 will exceed the System’s assumed return of 7.5%, future returns cannot be predicted.