Employee Contributions

Introduction

Nearly all employees of state and local government are required to share in the cost of their retirement benefit, a requirement that contrasts with pension plans in the private sector, whose participants are not required to contribute toward their pension benefit. Employee contributions to public pensions typically are set as a percentage of salary either by statute or by the board that oversees the pension plan. By providing a consistent and predictable stream of revenue to public pension funds, contributions from employees fill a vital role in financing pension benefits. Reforms made in the wake of the 2008-09 market decline included higher employee contribution rates for many public pension plans. This issue brief examines employee contribution plan designs, policies and recent trends. 

Date  Published

September 2023

Contact

Keith Brainard, Research Director
Alex Brown, Research Manager

Download Issue Brief