HARRISBURG, PA – The Board of Trustees of the Pennsylvania Public School Employees' Retirement System (PSERS) adopted a resolution at today’s meeting certifying a decrease in the employer contribution rate (ECR) for the upcoming fiscal year.
The ECR for the July 1, 2026 to June 30, 2027 fiscal year will decrease to 33.59%, a 41-basis point decrease from the current rate of 34%, the board’s actuarial firm Gallagher indicated in its December report.
“The board evaluates the rates we receive each year with a long-term perspective,” said PSERS Trustee Eric DiTullio, chair of the Finance and Actuarial Committee. “Rates will move over time, but our responsibility remains consistent, which is to support a sound retirement system for Pennsylvania’s public school employees.”
The decrease in the ECR reflects PSERS’ employers’ strong payroll growth offset by slightly unfavorable demographic experience during the recently ended 2024-25 fiscal year, according to Gallagher’s valuation results. These factors, along with sustained actuarially required ECR funding, contributed to an approximately $1.1 billion decrease in the system’s unfunded actuarial liability, while PSERS’ actuarial funded status increased from 64.8% to 66.6%.
“The Gallagher report shows continued improvement in PSERS’ overall financial position,” said PSERS Board of Trustees Chair Richard Vague.
Vice Chair Susan C. Lemmo added, “We remain focused on managing liabilities, supporting stability in employer contributions and maintaining a long-term, disciplined approach to funding.”
In other business, the board approved new investment commitments not to exceed $150 million to Cabot Industrial Value VIII, $100 million to LEM Multifamily Fund VII, $150 million to OceanSound Partners Fund III and $200 million to HarbourVest Strategic Partnership.
Additionally, the board was notified that PSERS achieved the Public Pension Coordinating Council Public Pension Standards Award for Funding and Administration for 2025. The award recognizes PSERS for meeting professional standards for plan design and administration as set forth by the National Association of State Retirement Administrators, National Conference on Public Employee Retirement Systems and National Council on Teacher Retirement.
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About the Pennsylvania Public School Employees' Retirement System
PSERS, founded in 1917, began operations in 1919 to oversee a statewide defined benefit pension plan for public school employees. PSERS' role expanded upon the passage of Act 5 of 2017 to include oversight of two new benefit options consisting of defined benefit and defined contribution (DC) components and a stand-alone DC plan. As of June 30, 2025, PSERS had a total net position of about $83.7 billion and a membership of about 262,000 active, 255,000 annuitants and beneficiaries, and 26,000 vested inactive members.
About the Board of Trustees
The 15-member Board of Trustees is an independent administrative board of the Commonwealth. The Board stands in a fiduciary relationship to PSERS’ members regarding investments and disbursements of the system’s funds. The Board’s other functions outlined in the Public School Employees’ Retirement Code include certifying contribution rates, authorizing the system’s actuarial valuation and independent audit, publishing an annual financial statement, and overseeing the operational activities performed by the system’s executive director and chief investment officer.