CONTRA COSTA COUNTY
EMPLOYEES' RETIREMENT ASSOCIATION

CCCERA’s retirement benefits are determined by a formula:
Years of Service X Final Average Salary X Retirement Age Factor = Retirement Benefit.

You can see that the larger the formula numbers are, i.e., more years of service, higher final average salary, the better your benefit.
However, we won’t receive benefits unless we contribute enough money during our careers to help pay for benefits after we retire.

By performing an Experience Study, CCCERA’s actuary determines how much money, at what rates (percentage of salary), must be contributed during each member’s career to fund a portion of the pension benefits for the lifetime of each member. One important aspect that the actuary reviews while conducting an Experience Study (which happens every three years), is salary increases. The actuary must estimate (assume) the total amount of salary increases each of us will receive by the time we complete our careers, in order that contributions collected (together with interest and investment returns) will fund our pensions.
By analyzing the data collected in the most recent Experience Study, our actuary observed that for the average employee, salary increases correspond more closely with years of service than with age. Regardless of what age you begin employment, CCCERA members have higher promotional and merit increases in the early stages of their careers. For example:
If you begin working for a CCCERA employer at age 26, on average:

1. You experience higher salary percentage increases early in your career, at relatively young ages.
2. You contribute for more years than an individual who enters the system at a later age.
3. Since the years when you get higher salary increases occur at younger ages, your rate may be lower than with the old assumption.

By the same token:
If you begin working for a CCCERA employer at age 40, on average:

1. You still experience higher salary percentage increases early in your career, but at relatively older ages.
2. You do not contribute for as many years as an individual who enters the system at an earlier age.
3. Since the years when you get higher salary increases occur at older ages, your rate may be higher than with the old assumption.

Prior to this observation, the actuary assumed (estimated) the average CCCERA member did not necessarily receive higher percentage salary increases at the beginning of his/her career. The salary assumptions were based on age only, without including early career salary increase information. Contribution rates were based on this assumption, which, after careful study, does not reflect CCCERA’s member experience as reflected in the new assumption.
The newest experience study verifies that, on average, employees hired at a later age are equally likely to receive higher percentage increases in the first years of employment as are younger members entering the system. This causes a slight contribution cost shift at certain ages, with some younger members receiving lower contribution rates over more years, and some older members receiving higher contribution rates over fewer years, to arrive at funding for retirement benefits.

For more information:
To see the exact ages at which these contribution rates change under the new assumption, please see the 2008 Spring edition of FYI.
The Experience Study performed by CCCERA’s actuary is posted on the Publications page of this web site.
The new rates for 2008/2009 are also on the Publications Page of the website.
A glossary of terms is located on this web site in the General Member Handbook.

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