SERS is a defined benefit public pension plan. This means that SERS’ primary responsibility is to assure that sufficient funds will be available to provide lifetime retirement and disability benefits, as well as survivor benefits, Medicare B, and lump sum death benefits. Laws governing SERS’ financing intend that contributions rates remain approximately level from generation to generation. SERS works with an actuary to calculate the future cost of benefits being earned today and what amount of employer contributions must be set aside to cover those benefits.

SERS has five main sources of income: employer contributions, member contributions, investment income, health care premiums, and Medicare subsidies for retiree prescription drugs.

Deductions from plan net assets refer to the expenses SERS covers each year. The main expenses are pension benefit payments, health care coverage, Medicare Part B reimbursements, refunds of employee contributions to members who leave SERS, and administrative expenses.