Board Sets June 30, 2010 Interest Rate on Member Accounts at 1%, Rate Charged on Credit Purchases at 8%
At the April Board meeting, the PSRS/PEERS Board of Trustees voted to set the interest rate credited to member accounts at 1% for June 30, 2010.
The Board sets the rate of interest paid on member account balances each April. During the previous fiscal year, this rate was 2%. This interest is credited once each year, on June 30, on the total balance in the member’s account as of the previous June 30, until the membership terminates.
This interest rate has no impact on a member’s monthly benefit at retirement. Interest paid on a member’s account is payable to those members who request a refund of their account balance before retiring from PSRS/PEERS, and in the lump-sum payments paid to the beneficiaries of deceased members.
“Given the current economic climate, our Board felt it responsible and prudent to reduce the interest paid on member account balances to a more conservative rate,” said Steve Yoakum, PSRS/PEERS Executive Director. “We are pleased that we can do this while still providing our members a rate comparable to that currently paid on passbook savings accounts.”
The Board also voted to keep the rate of interest charged on reinstatements of previous credit and applicable service purchases at 8%. This is the actuarially assumed rate of return on investments and is the rate charged on such purchases of service since 1980.