PERAC Memo #1 - 1998: 1998 Interest Rate Set at 2.4%

1998 Interest Rate Set at 2.4%

Summary

PERAC Memo #1/1998 sets the "regular interest" rate for 1998 at 2.4%, as determined under Section 22(6)(b) of Chapter 32 based on average savings account rates from a sample of financial institutions. Boards must apply this 2.4% rate to accumulated total deductions (post-1946) when crediting interest for 1998 refunds and retirements, and on outstanding member balances as of December 31, 1997, with interest credited as of December 31, 1998. No further action beyond correct rate application is required.

Full Text

PERAC MEMO #1/1998 M E M O R A N D U M TO:All Retirement Boards FROM:Robert F. Stalnaker, Executive Director RE:1998 Interest Rate Set at 2.4% DATE:January 15, 1998 In accordance with the provisions of Section 22(6)(b) of Chapter 32 as amended by c. 306 of the acts of 1996, “regular interest” for regular and additional deductions made after January 1, 1984, shall be a rate established by the Public Employee Retirement Administration Commission in consultation with the Commissioner of Banks, and shall be obtained from the average rates paid on individual savings accounts by a representative sample of no less than 10 financial institutions. The average rate paid has been determined to be 2.4% for the calendar year 1998. The average rate 2.4% is to be applied on the accumulated total deductions and interest made on or after January 1, 1946. Such interest should be credited during the calendar year 1998 for refunds and retirements and on outstanding balances as of December 31, 1997 on December 31, 1998.