Reminder: 2022 RS Plan Lump Sum Calculations No Longer Include PBGC Rates

In determining participant Retirement Security (RS) Plan benefits as single cash payments (sometimes referred to as “lump sum payments”), NRECA uses different mortality and interest rate assumptions depending on when that individual earned benefits within the plan.

Calculations for 2022 single cash payment distributions will use only the 30-year Treasury rate—also known as the General Agreement on Tariffs and Trade (GATT) rate—which has been the IRS minimum rate since January 1, 2000, and a three-segment rate created in the Pension Protection Act of 2006, which became the IRS minimum rate effective January 1, 2008.

As previously communicated, the Pension Benefit Guaranty Corp. (PBGC) stopped publishing rates at the end of 2020. While NRECA extended its use of the last-published PBGC interest rate through the end of 2021 to aid participants in their planning, starting in 2022 NRECA calculations will no longer include interest rates from the PBGC for calculating the portion of benefits a participant accrued before 2000.

For questions related to this change or about RS Plan benefit estimates, please speak with your local field representative. Participants with retirement planning questions can reach out to a member of NRECA’s Personal Investment & Retirement Consulting team at 866.673.2299, option 6, or via email at pirc@nreca.coop.