PROVIDENCE, R.I. - The state of Rhode Island will make a higher contribution than expected to its public pension plan in fiscal year 1997, according to a new valuation study of the state's pension plan by William M. Mercer.
The board of the $3.4 billion Rhode Island Retirement System, Providence, approved new contribution rates for fiscal year 1997 that are 5.6% higher than the contributions for 1996, based on higher than expected estimates for future pension costs. The fund will make a $89.7 million contribution, compared with the payment of $85 million it projects for 1996.
The increased contribution will make up for the difference between the actuarial costs and the employee contributions, which are fixed at 7.75% of salary for employees and 8.5% for teachers. The study found the average pay of state employees had increased 5.5% and teachers' pay grew by 6.3% in fiscal 1994, instead of the assumed rates of 4.5%.