Effective Jan. 4, 2016, the Money Purchase factors will change. The changes to the factors are a result of a recent actuarial experience study which recommended a reduction of the assumed rate of investment return and updated mortality tables to reflect an overall increased life expectancy. An actuarial experience study is required by state statute at least once every five years.
When SURS calculates a retirement benefit, all eligible calculation types are performed and the annuity is based on the calculation that provides the highest benefit. For members retiring on or after Jan. 4, 2016, under the Money Purchase formula, the change in Money Purchase factors will result in an average 6-7% downward adjustment in their monthly annuity. Members can offset the adjustment by delaying retirement by approximately nine (9) months for active participants and 11 months for inactive participants.
The changes to the Money Purchase factors will not affect:
• Current annuitants
• Survivor benefit recipients
• Self-managed plan members
• Members who began participation on or after July 1, 2005
• Member whose benefit is highest under the General Formula calculation
• Members retiring under the Money Purchase formula prior to Jan. 4, 2016
Retirement calculations are unique to each individual member. For this reason, SURS encourages all members who are considering retirement in the next year and who might be affected by the Money Purchase factor changes to log on to their personal account on the SURS Member website and utilize the benefit estimator. By calculating estimates for retirement dates before and after the January 4, 2016, effective date, members can gain a clearer picture of how the factor changes will impact benefits.
For more information, read the Money Purchase Factor Change Fact Sheet or view the Money Purchase Factor Change video, both available at www.surs.org