At its May meeting, the Board of Trustees decreased KPERS’ long-term assumed investment rate of return on the KPERS Trust Fund from 7.75% to 7%. The investment assumption has been changed 8 times since 1962, most recently in 2016.
Why Is This Important to Employers?
This change affects employers because it’s a major part of calculating funding. Meaning employer contribution rates will increase to make up for the lower estimated investment returns over time. It doesn’t affect member contributions or retiree benefits.
Timing
No changes in the KP&F certified employer rates for 2022 and 2023. The change will affect rates starting with Calendar Year 2024 for your employer. We’ll have that official rate available in late July for budgeting
purposes. Please forward this email to anyone who works with the budget at your employer. In 2023, most Local KP&F employers will pay 22.86% for their regular retirement contributions. The Board and employers have certified this
rate. The projected rate for 2024 is 23.11%.
*The 2024 and 2025 projections are based on early estimates for the next valuation. It could change up or down based on the 2021 valuation due out in July. But we anticipate the projection is fairly accurate.
Why Make the Change?
A matter of fairness. An investment rate assumption that's too high asks employers to pay more than their fair share in the future.
Based on current and projected market data from our investment experts.
Based on best practices for the actuarial industry. KPERS is funded on an actuarial basis.
