News & Blog


STRS Update: Mitigating Rate Reduction

Mitigating rate will decrease for ARP participants

At the December 2021 State Teachers Retirement System (STRS) Retirement Board meeting, it was announced that the “mitigating rate” — the rate charged to participants in the Alternative Retirement Plan (ARP) — will decrease from 4.47% to 2.91% of payroll for Fiscal Years 2023 through 2027.

The mitigating rate is designed to compensate STRS for lost investment opportunity resulting from employees who are eligible for such plans not making contributions to support the STRS retirement plans. This change is based on a five-year rate study that was concluded at the end of the 2021 Fiscal Year.

Several years ago, a group of ARP participants sued STRS over an increase in the mitigating rate. The class action suit was settled and those who opted into the settlement received compensation.

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