SURS Money Purchase factors change July 2
Last year the SURS Board of Trustees set the effective date for changes to the Money Purchase factors as July 2, 2022. This change could affect your retirement benefit.
The changes to the factors are a result of the 2021 actuarial experience study, which recommended a reduction of the assumed rate of investment return. An actuarial experience study is required by state statute at least once every three years. The board voted June 4, 2021, to reduce the long-term assumed rate of investment return from 6.75% to 6.5%. This rate impacts the Money Purchase factors used in calculating retirement benefits.
When SURS calculates a retirement benefit, all eligible calculation types are performed, and the annuity is based on the calculation that provides the highest benefit. For members retiring on or after July 2, 2022, under the Money Purchase calculation, the change in Money Purchase factors will result in an average 2% to 4% downward adjustment in their monthly annuity.
Members can offset the adjustment by delaying retirement by approximately three to four months for active participants and four to six months for inactive participants.
The changes to the Money Purchase factors will not affect:
- Current annuitants.
- Current survivor benefit recipients.
- Retirement Savings Plan members.
- Members who began participation on or after July 1, 2005.
- Members whose benefit is highest under the General Formula.
Retirement calculations are unique to each individual member. For this reason, SURS encourages all members who are considering retirement in the next two years and who might be affected by the Money Purchase factor changes to log in to their personal account on the SURS Member Website and utilize the benefit estimator. By calculating estimates for retirement dates before and after the July 2 effective date, members can gain a clearer picture of how the factor changes could impact benefits.
For more information, join our Money Purchase factor change informational webinar March 24 from noon–1 p.m.