Employee & Employer Contributions
Your employer chooses from a menu of benefit options that best suits their workforce management goals and budgetary constraints. One of those elections is whether or not employees will assist with the funding of their LAGERS benefit.
When an employer is employee contributory, it means that all covered employees will be required to contribute 4% of gross pay to LAGERS as a condition of employment. This 4% of gross pay is added to the employer’s portion to make the full required contribution. For example, if the full required contribution is 12% of gross payroll, an employee contributory employer would pay 8% and the employee contributions would make up the remaining 4% of gross payroll.
Notes About Employee Contributions:
- You or your beneficiary will never receive back less than you paid in, plus interest
- Contributions are made after-tax (will not reduce your taxable income today).
- A portion of your retirement benefit will not be taxable
You can view your accumulated contribution balance online through your myLAGERS account.
When an employer is employee non-contributory, this means all covered employees will not be required to contribute and the employer pays the entire cost to fund the benefit.
When an employer has elected the non-contributory refund, this means the employer at one point required employees to contribute, have been non-contributory for at least 2 years and chose to refund active employees’ contributions plus interest.