Earlier this year, SURS announced that the factors table used to calculate SURS retirement benefits under the Money Purchase calculation will change effective July 2, 2022. This change is a result of a study required by state statute. Read on to determine if you are impacted by this change, and for important considerations if you are thinking about retirement.
What If I'm Considering Retirement Soon?
If you are planning to retire in the next two years, or deciding whether to retire this year or next year, carefully consider the impact of the factors change. SURS members retiring on or after July 2, 2022 with the highest retirement calculation under the Money Purchase calculation will be impacted by these changes. The following resources are available to help answer your questions:
Does This Impact Me?
The money purchase factors change will NOT affect you, if you are:
- Not yet eligible for retirement
- Already retired
- Participating in the SURS Self-Managed Plan (SMP)
- Retiring under the General Formula calculation
- SURS-eligible on or after July 1, 2005 (i.e., not eligible for the Money Purchase formula)
What Is Changing and Why?
These changes happen from time to time due to state mandated actuarial experience and economic assumption studies. Based on the results of these studies, the SURS board voted to reduce the long-term assumed rate of investment return from 6.75% to 6.5%. This rate also impacts Money Purchase factors used in calculating retirement benefits.
SURS calculates a retirement benefit using all formulas for which the member is eligible, and the member's annuity is based on the formula that provides the highest benefit. For some members retiring on or after July 2, 2022, under the Money Purchase formula, the change in Money Purchase factors could result in a downward adjustment in their monthly benefit of 2%-4%. Members can offset the adjustment by delaying retirement by approximately 3 to 4 months for active participants and 4 to 6 months for inactive participants.
SURS encourages employees who are considering retirement in the next two years and who might be affected by the Money Purchase factor changes to log on to your personal account on the SURS Member Website and utilize the benefit estimator. By calculating estimates for retirement dates before and after the July 2, 2022 effective date, you can gain a clearer picture of how the factor changes could impact benefits. SURS members who are more than three years away from retirement will likely be subject to future experience studies that could result in different factors.
Questions?
For more information see the Money Purchase Factor Change fact sheet at www.surs.org/money-purchase-factor-change/ or contact SURS at 217-378-8800 or 800-275-7877 with questions.
