Board Holds Interest Rate Paid on Member Accounts at 1%, Rate Charged on Credit Purchase Balances at 8%
At the April meeting of the PSRS/PEERS Board of Trustees, the Board voted to set the interest rate credited to active member accounts at 1% for June 30, 2012. This rate is unchanged from the previous fiscal year.
Each April, the Board sets the interest rate paid on active members’ account balances. Interest is credited June 30 each year on the total balance in a member’s account, as of the previous June 30. This occurs until the membership is closed due to retirement, an account refund or death.
The interest rate has no impact on the amount of your retirement benefit. Interest is paid out through lump-sum payments made to members who request account refunds, and to the beneficiaries of deceased members.
“Although we have seen some economic improvement in the past year, interest rates, overall, have not changed significantly, said Steve Yoakum, PSRS/PEERS Executive Director. “Our Board feels that 1% remains a conservative, yet fair, rate on member account balances.”
The Board also voted to keep the interest rate charged on reinstatements of previously forfeited PSRS/PEERS credit and applicable credit purchases at 8%. This is the Systems’ assumed, or target rate of return on investments, and is the rate charged on such credit purchases since 1980.