Active, eligible employees and all employers contribute to the retirement system.

Membership is mandatory for most employees in permanent positions, working half-time or more; the exceptions are elected officials, who may choose membership by declaration, and employees who begin working after the age of 60. These individuals may waive membership in the system.

The amount you contribute is based on your salary(1), your differentials(2), and your age(3) when you enter the system.

1. Your base salary is expected to increase throughout your career.
2. Differentials are additional pay elements that may increase your pay and add to your retirement benefit, such as bilingual pay, uniform allowance, etc. (All differentials are not subject to retirement.)
3. CCCERA uses the “entry age normal” method of determining contribution rates.
(“Entry age normal” means the age you enter the system is the starting point for figuring a present estimate of the amount your future benefit will cost, factored as a level amount for the number of years it will take to arrive at your retirement age.)

This method of contributing is advantageous, because pre-tax contributions lower your current taxable income. The tax normally paid on this amount is “deferred;” you won’t pay income tax on your contributions until you begin to draw a retirement benefit, or receive a lump sum payout, closing your account. While contributions lower your present disposable income, you are building a sound investment in your future security.

Employees and employers share the cost of future retirement benefits.

However, employers pay substantially more than employees to fund these benefits. If you look at your paycheck stub, you can see the difference in amounts. Most employers pay 50% (or more) of employees’ basic contribution rates (called subvention). Employers also pay for the unfunded liability of the system. The unfunded liability is a cumulative amount needed to fund future benefits, when those benefit costs increase due to benefit improvements, higher final average salaries, terminal pay items, etc.

Contribution rates can change for both employees and employers, depending on the cost of benefits, economic assumptions, and demographics of the membership. Retirement industry professionals often cite the "No Free Lunch Rule," meaning you can't expect to receive benefits in the future that you don't pay for today. Your personal retirement account must be funded in order to invest and grow.

Interest is credited on your contributions every June 30th and December 31st.
The Retirement Board adopts an interest rate annually. This interest amount is subject to change, depending on actuarial recommendations. The current interest rate is published each year in your annual benefits statement.