Each year, the State sets a “contribution rate” for its various pension systems, the amount of each employee’s salary that must be paid by the employer into the system for the year. This calculation — based each year on actuarial analysis of current funding conditions and needs — has meaningful effects on both the State budget (for State employees and teachers) as well as for local governments who participate in the State pension system as a benefit for their own employees.

For FY 2011, the proposed contribution rates are:


14.34% Teachers Retirement and Pension
11.69% State Employees Retirement and Pension
57.03% State Police
47.67% Law Enforcement Officers (LEOPS)
59.07% Judges


According to the November 20 letter to the Governor (and other stakeholders) from the Maryland State Retirement and Pension System (actually their supplemental materials), total contributions to all employees in the various systems will total more than $1.4 billion for the coming year.

By way of comparison, last year’s failed legislation to shift some part of teacher pension costs to counties included a fiscal note that incorporated some estimations of future year contribution rates. The fiscal note for one of those bills suggested that the expected rate for the teacher system for FY 2011 would be 14.27%. In short, the announced rates, despite volatility in equity markets in the last year, have seemingly followed a predicted (upward) path — the contribution rate for teachers in FY 2010 is 13.15%.