What does it mean to be Non-Contributory?
The employer makes all necessary contributions to LAGERS. Employee contributions to LAGERS are not required.

Who makes the decision to become Non-Contributory?
The governing body of a member subdivision may elect to become non-contributory.

Does this increase the employer contribution rate?
Yes. The employer rate usually increases by about 3.6% - 3.9%.

Are the employees' retirement benefits affected by becoming non-contributory?
No. LAGERS benefits are determined by multiplying the benefit factor elected by the employee's final average salary and years of service credit. The election to become non-contributory does not change an employee's retirement benefit, but changes the way that benefit is funded.

What happens to the employees' contributions after the non-contributory election?
The employees' accounts are frozen and continue to be credited with interest. These contributions will remain in the employee's account until retirement, termination or until the subdivision's governing body elects to refund the employees' contributions.

May an employee withdraw his or her employee contributions after the non-contributory election?
Employee contributions may only be withdrawn upon termination from the LAGERS system or if the subdivision's governing body elects to refund employee contributions. If a member leaves LAGERS employment and elects to take a refund of their employee contributions, all contributory service credit would be forfeited.

What about the Non-Contributory Refund?
An employer must participate in the non-contributory program for at least two years before the governing body may elect to refund the employee contributions. Each current employee who had previoously made contributions to the system would be refunded those contributions plus interest. Employees' service credit would not be forfeited and the cost of this refund would be added to the employer contribution rate.

What happens to the employer contributions?
The employer contributions are credited to the employer's account.