DROP Interest Crediting Rate Change for 2017

Date: Nov 04, 2016

 

 
At its November 4, 2016 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, 2017.

  •  The interest rate for DROP participation accounts was adjusted to 1.5 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 1.7 percent, through December 2016.
  • The interest rate for DROP Annuities was adjusted to 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 3.0 percent for anyone who enters into a DROP retirement annuity through December 2016. 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.




Document Under Categories: Board, DROP

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