A funded ratio is a measure of assets to liabilities. A ratio of 100 percent indicates employer contributions will approximate the expected long-term rates. If a funded ratio is above 100 percent, employer contributions will generally be less than the expected long-term rates while employer contributions will generally be more than the expected long-term rates if a funded ratio is below 100 percent. According to the Public Fund Survey of the National Association of State Retirement Administrators, most public plans are currently funded at 75 percent.
As of April 1, 2012, the funded ratio of the Employees’ Retirement System (ERS) was 87.2 percent, while the funded ratio of the Police and Fire Retirement System (PFRS) was 87.9 percent. As a result, the average employer contribution rates for 2014 will be 20.9 percent in ERS, and 28.9 percent in PFRS.