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SERS Home  >  Employers  >  Membership  >  ARP
Choosing an Alternative Retirement Plan (ARP)

This option only applies to college and university employees.

Newly hired full-time college and university employees have the option of either contributing to SERS or an Alternative Retirement Plan (ARP).

You are responsible for notifying SERS of an employee who is eligible for an ARP within 10 days of the employee’s first day of employment by submitting a Notice of Employment or Reclassification of Employee Eligible for Alternative Retirement Plan (5.171).

Eligible employees have 120 days from their first day of full-time employment to enroll in the ARP. An employee who chooses the ARP must sign the Retirement Plan Election Form (20.487b ARP-3) and return it to the employer.

Once the form is submitted, it is irrevocable. As the employer, you must file a copy of the election form with SERS within 10 days of receiving it from the employee. 

The law also provides that the college sends a percentage of each ARP employee’s salary to SERS on a monthly basis for unfunded accrued liabilities. Once an employee elects the ARP, the employee and remaining portion of the employer contributions are sent directly to the ARP.

The mitigating rate, paid by college and university employers to SERS on behalf of ARP participants, will be reduced from 6% to 3.48%, effective July 1, 2017.

Employers must implement the necessary changes to ensure that 3.48% of employer contributions for ARP participants are remitted to SERS for earnings on or after July 1, 2017. Employer ARP reports must reflect the new rate starting with the July 2017 reporting.

This change is related to legislation that includes a new method of calculating the mitigating rate. It also places a 4.5% maximum on the rate, and requires that the rate be reviewed every five years.