PRIORITY ALERT: 2026 Retirement Security Plan Single Cash Payment Interest Rates Released
Following a delay due to the federal government shutdown, yesterday the IRS finally released the September 2025 interest rates used for calculating Retirement Security (RS) Plan single cash payments for both traditional and cash balance benefits in 2026.
As a reminder, under normal circumstances NRECA’s time frame for announcing final RS Plan interest rates has changed—from mid-December to October—to provide participants more time to make retirement decisions. While the unexpected federal government shutdown cut into that window this fall, participants still have a few additional weeks compared with previous years.
Within 24 hours of receiving the September 2025 interest rates from the IRS, NRECA was able to calculate the factors used to calculate single cash payments for both traditional and cash balance RS Plan benefits in 2026. Those updated factors have now been loaded to the RS Plan system and will be used for benefit estimates for distribution event dates in 2026. Participants requesting distribution option forms for 2026 event dates will also receive benefit estimates utilizing these new factors.
The factors (rates) used for calculating single cash payment amounts depend on when an employee earned benefits under the RS Plan:
- GATT rate (based on 30-year Treasury rate) generally applies to benefits earned before 2008.
- Pension Protection Act (PPA) rates apply to benefits earned after 2007. PPA uses three rates representing distinct segments (short-term, medium-term and long-term) to account for the different time frames that annuity payments would have been made.
Each interest rate, in combination with other factors—pay, benefit service and age—can have a significant effect on the amount of a single cash payment.
| RATE | 2026 | 2025 |
| GATT | 4.74% | 4.04% |
| PPA Segment 1 (payment in first five years) | 4.06% | 4.17% |
| PPA Segment 2 (payment in next 15 years) | 5.12% | 4.76% |
| PPA Segment 3 (payment out further than 20 years) | 5.93% | 5.25% |
For co-ops using the RS Plan’s traditional formula:
The overall increase in IRS interest rates, and the corresponding impact on the single cash payment conversion factor for 2026, will generally produce lower single cash payment amounts for 2026 versus those that would result from using the 2025 single cash payment factor.
For co-ops using the RS Plan’s cash balance formula:
Single cash payments are based on the account balance earned under the cash balance formula. For participants who wish to take their RS Plan benefit as an annuity, the account balance is converted to the various monthly benefit options using similar factors as used under the traditional formula—essentially the opposite type of benefit conversion to what’s done to determine the traditional-formula single cash payment amount. Due to the overall increase in the interest rates, the conversion factor will generally be lower in 2026, producing higher annuity amounts than would result from using the 2025 conversion factors.
Resources for participants
You can share this educational flier with participants. It outlines the effect interest rates have on single cash payments. Participants who need assistance with retirement distribution questions can contact the Personal Investment & Retirement Consulting (PIRC) team at pirc@nreca.coop, or 866.673.2299, option 6, between 7 a.m. and 7 p.m. Central time.