The following is to provide guidance for your planning purposes and make you aware of a change to the schedule in notifying employing agencies of the contribution rates payable to the Retirement System for local governmental employees.
The Local Governmental Employees’ Retirement System’s (LGERS) retirement benefits are funded by member contributions (6% of compensation), employer contributions, and investment returns. Employer contribution rates are based on a percentage of members’ compensation and determined each year by the LGERS Board of Trustees (Board) pursuant to G.S. 128-30(d).
The Board holds regular quarterly meetings in January, April, July, and October. Typically, the Board establishes the employer contribution rates to be effective July 1 at the previous January meeting. Under this schedule, the Retirement Systems Division (RSD) has published the employer contribution rates for each employer in February or March to be used by local governments in their budget-setting processes.
During its January 30, 2025, meeting, the Board did not establish employer contribution rates to be effective July 1, 2025. Board members plan to establish the employer contribution rates at the April 24, 2025, meeting. Therefore, RSD will not be able to publish the rates in February or March. RSD will publish them as soon as administratively possible after the April 24 meeting.
Meanwhile, Board members asked that RSD provide guidance to employers describing the “likely rates” to be effective July 1, 2025. These “likely rates” are based on the most recent actuarial valuation reports and the Board’s policy adopted as described under G.S. 128-30(d)(5).
- For members who are law enforcement officers (LEOs):
- Employer contribution rate for retirement benefits: 15.94% of compensation.
- The 15.94% rate is equal to a total rate of 16.10%, reduced by 0.16% for the “court cost offset” toward law enforcement retirement benefits under G.S. 143-166.50(d).
- Employer contribution rate for death benefits: 0.14% of compensation.
- Employer contribution rate for retirement benefits: 15.94% of compensation.
- For non-law enforcement members:
- Employer contribution rate for retirement benefits: 14.35% of compensation.
- Employer contribution rate for death benefits: Specific to each employer who has elected coverage for non-law enforcement employees. See Appendix F, pages 42-56 (out of 57 of the PDF) of this report: 14. 2023 Actuarial Valuation - Death Benefit Plans.pdf
The employer contribution rates described above would be further increased in these situations:
- Employers paying an “accrued liability” rate, also known as a “prior service” rate. See Appendix F, pages 144-145 (out of 162 of the PDF) of this report: 11. 2023 Actuarial Valuation - Local Governmental Employees' Retirement System.pdf.
- Employers paying a contribution-based benefit cap liability through ongoing increases to the employer contribution rate, pursuant to G.S. 128-30(d)(4a).