Retirement Monitor - August 2016

<p>In this issue:</p> <p>Factors for Calculating Options 2, 3, 4, 6-2 and 6-3 are Changing Effective January 1, 2017; Reminder &ndash; TSERS Employer Contribution Rates Increasing January 1, 2017</p>

 

 

 

 

 

Table of Contents

  • Factors for Calculating Options 2, 3, 4, 6-2 and 6-3 are Changing Effective January 1, 2017
  • Reminder – TSERS Employer Contribution Rates Increasing January 1, 2017

Factors for Calculating Options 2, 3, 4, 6-2 and 6-3 are Changing Effective January 1, 2017

Every five years, through what is known as an Experience Review, the actuarial assumptions of the North Carolina Retirement Systems are reviewed. The latest Experience Reviews, for all Retirement Systems, were presented to the Boards of Trustees and adopted on October 22, 2015. Various demographic and economic assumptions were reviewed and updated to reflect actual experience for the previous five years. As a result, the factors used for calculating survivorship options 2, 3, 6-2 and 6-3, and option 4, may change for retirements effective on and after January 1, 2017. This process will not affect the calculation of the Maximum Allowance.

Members who are considering retiring before the end of December 2016, and are choosing options 2, 3, 4, 6-2 or 6-3, may wish to visit our website at the link below to use the online retirement estimator. For their convenience and planning, they can obtain estimates for both this year and next to see what effect, if any, the new factors have on their benefits.

Reminder – TSERS Employer Contribution Rates Increasing January 1, 2017

The Retirement Systems Division recently communicated the employer contribution rates for the 2016-2017 fiscal year to TSERS employers. The State Health Plan also recently sent information to TSERS employers regarding the Retiree Health Benefit Fund portion of the employer contribution rates changing in January 2017. The contribution rates will be increasing in January as a result of an increase in the Retiree Health Benefit Fund portion of the contribution rate. Below is a breakdown of the TSERS employer contribution rate for general employees:

From July 1, 2016, to December 31, 2016:
Retirement System Pension Fund 9.98%
Death Benefit Trust Fund 0.16%
Retiree Health Benefit Fund 5.60%
Disability Income Plan 0.38%
  15.12% from Juy 1, 2016, to December 31, 2016
From January 1, 2017, to June 30, 2017:
Retirement System Pension Fund 9.98%
Death Benefit Trust Fund 0.16%
Retiree Health Benefit Fund 6.02%
Disability Income Plan 0.38%
  16.54% from January 1, 2017, to June 30, 2017

Please keep in mind that the 16.12% employer contribution rate for December 2016 must be submitted to the Retirement Systems Division by the fourth business day of January 2017 (no later than January 6, 2017), and the new 16.54% employer contribution rate for January 2017 must be submitted to the Retirement Systems Division by the fourth business day of February 2017 (no later than February 6, 2017).

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