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To:     Business Managers
Human Resources Facilitators

From:  Dennis Press, University Controller

Date:  July 19, 2010

The standard notifications regarding benefit rates will be distributed again this year, but I wanted to mention an issue regarding the Employer Contribution for State Retirement.  The Employer Contribution rate will increase to 10.51% for FY 2010-11.  The rate has two components:

  • Regular Employer Contribution 9.15%
  • Employer Contribution Reserve 1.36%
  • Total Rate                          10.51%

Based on information provided to the University by State-level offices, 1.36% of the 10.51% needs to be segregated and accounted for separately.  The funds will be held in reserve in case there is a reduction in the employer contributions to the retirement system later in the fiscal year.  If there is a reduction in the employer contributions, the State funds portion could be redirected to offset receipts shortfalls at the State level.  Additional information will be provided as it becomes available.

Therefore, a new FRS expense object code 1823 has been established to account for the 1.36% portion of the Employer Contribution for State Retirement.  Existing FRS expense object code 1822 will account for the 9.15% portion of the Employer Contribution for State Retirement.

Thank you.

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