Combination Plan contribution rate change effective January 01 2020

The Pension Board recently decided that the Plan is sufficiently healthy to reduce the contribution rate for the Defined Retirement Benefit Account (DRBA), which funds the defined benefit component of the Combination Pension Plan. This contribution rate has been set at 5.05% of salary since 2011 and will now be reduced to 4% effective January 1, 2020.

Although this change directly targets the total contribution rate for the DRBA, which is funded by university contributions, the Plan Document specifies that one-third of the reduction be to the benefit of members.  This provision results in adjustments to the Combined Contribution Account (CCA) contribution rates which are detailed in the table on the next page, but, most importantly, the process will result in a modest reduction of 0.35% of salary to the employees’ contribution rate.

As a result, the new contribution rates will be as follows, effective January 1, 2020:

For more information about the contribution rates and/or the various contribution accounts, please review the Contribution Fact Sheet available here, or contact us for assistance.