DROP Interest Crediting Rate Change for 2018

Date: Nov 03, 2017


At its November 3, 2017 meeting, the SDCERS' Board of Administration approved staff's recommendation to change the DROP (Deferred Retirement Option Plan) interest rates for the DROP Participation Accounts and DROP Annuities, effective January 1, 2018.
The interest rate for DROP participation accounts was adjusted to 2.0 percent. DROP Participation Accounts are the accounts that Active DROP members (those still working) contribute to during their five-year-maximum participation period. The current rate is 1.5 percent, through December 2017.
The interest rate for DROP Annuities remains at 2.8 percent. DROP Annuities are a payment option available to DROP participants after they retire from DROP. Under this payment option, retirees receive a monthly DROP payment (annuity) in addition to their monthly service retirement benefit (pension). The current rate is 2.8 percent for anyone who enters into a DROP retirement annuity through December 2017. Important: This has no effect on retirees who have already entered into a DROP annuity. The annuity rate is permanent once the annuity disbursement begins.

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