Board Sets Interest Rate on Member Accounts at 2% for June 30, 2009
At the April Board meeting, the PSRS/PEERS Board of Trustees voted to set the interest rate credited to member accounts at 2% for June 30, 2009.
The Board sets the rate of interest paid on member account balances each April. For the past several years, this rate has been set at 6%. 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.
“Given the current economic climate, we are pleased that we can continue to provide our members a rate that is well above the interest currently paid on passbook savings accounts. 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.
This interest rate has no impact on a member’s retirement benefit amount. It is included in the account balance refunded to those members who withdraw their funds before retiring from PSRS/PEERS, and in the lump-sum payments of account balances to the beneficiaries of deceased members.
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.