Board Sets 3.5% Interest Rate on Contributions

At its April meeting, the PSRS/PEERS Board of Trustees voted to set the interest rate for active members’ contributions at 3.5% for the 2026-2027 school year.

How Interest Works

Interest is added to your membership each year on June 30. It’s calculated on the total amount in your membership as of the previous June 30. This amount includes your contributions plus any interest already earned. Interest continues to accrue until you retire, take a refund, leave covered employment for five straight years without being vested, or pass away.

Why the Interest Rate Matters

Your earned interest does not affect your monthly retirement benefit. However, earned interest matters if you:

• Take a refund of your contributions and interest, paid as a lump sum, or
• Have a beneficiary who receives a lump-sum payment after your death.

How the Rate Is Set

Each April, the Board reviews current interest rates on deposit accounts and short-term securities. This ensures the rate is similar to what you would earn with a savings account or something comparable.

Interest on Reinstatements and Service Purchases

The Board also voted to keep the interest rate at 7.3% for reinstating forfeited service and certain service purchases. This rate matches the Systems’ assumed rate of return and helps recover earnings PSRS/PEERS could have made if the member’s original contributions had remained invested.