Employee Contributions

Funding to pay benefits comes from three basic sources - contributions from the member, contributions from the employer and investment earnings. Recommended contribution rates for both the employee and employer are determined by outside actuaries and are changed from time to time based on the results of the periodic actuarial studies. Contributions are taken as payroll deductions on a pre-tax basis. Members also receive a member statement (in January) and which will report accumulated contributions.

Your contribution is computed on your base pay plus any special pays considered compensation earnable for retirement purposes such as bonuses, shift differentials, and allowances for uniform, to name a few examples. Note that your retirement contribution will be taken even from a partial paycheck. If the paycheck amount is insufficient to cover the entire contribution you will only receive partial service credit for a partial contribution.

Contribution Rate

Contribution rate is based on the following factors:
  • Tire I - III
    • Entry age
    • Type of plan (Miscellaneous or Safety)
  • Tier IV
    • Type of plan (Miscellaneous or Safety)

Contribution Rate Change

Contribution rates change based on the fund's outside actuary's annual studies of the rates. The Board of Retirement recommends contribution rate increases or decreases on the basis of those studies. Members may not borrow against contributions, increase contributions, nor add to them with other funds. As noted earlier, this is a defined benefit plan and the eventual retirement benefit will be calculated according to a formula. Increasing contributions would not increase retirement allowance.

Overtime Pay & Accrual Sick Leave Payoffs

Overtime pay and accrual sick leave payoffs are excluded from contribution calculations upon termination. A member should contact the employer for any information as to whether a particular item in pay will be included in retirement contribution calculations. The types of pay included for contribution purposes are the same types of pay included in the compensation earnable used to determine retirement allowance when a member retires.

Contribution Duration

A member contributes to their retirement fund throughout their career with a MCERA-covered employer. The only exception to this requirement and which will nullify the requirement to make further contributions to the plan is if a member were an MCERA member on March 7, 1973, and have attained 30 years of total service eligibility credit including reciprocal time and/or prior service purchase time or if a member were a Safety Tier I - III member with 30 years of continuous safety service credit.

Employer Contributions

Employer contribution rates vary by plan membership. Employer contributions are not refundable to the employee at any time.