Arizona State Retirement System Contribution Rate Changes

Effective July 1, 2011, the Arizona State Retirement System (ASRS) rate will change. The new contribution rate will apply to all employees who participate with ASRS.

The rate increase previously announced by ASRS would have moved the employee retirement contribution from 9.6% to 10.50% of gross pay as of July 1, 2011. Long term disability would remain at .25%.

In addition, the Arizona legislature recently passed changes to employee benefits that include a change to the 50% employee / 50% employer contribution rate split for ASRS contributions.

Beginning July 1, 2011, the rate split will be 53% employee / 47% employer (with the savings required to be returned to the state’s general fund). While more detailed information is still coming from ASRS, they are estimating that the increase to employees due to this change will be approximately 0.6% - 0.7%.

This will increase the employee contribution to approximately 11.1% – 11.2% of gross pay (a total increase of approximately 1.5% - 1.6% from what is being paid right now).

Watch for further communication as we receive more detailed information from ASRS about the exact amount of the increase and the impact on the current .25% long term disability portion of the contribution.