RS Plan: Timing for Requesting Year-end Benefit Estimates
As we move into the Fall of 2022, many cooperative employees who are eligible for full or quasi-retirement will be requesting benefit estimates from the Retirement Security (RS) Plan. To ensure timely and accurate completion of these requests, please be aware of the following timing.
Benefits administrators should run 2022 estimates—and, for participants who want to compare results for more than one retirement date, 2023 estimates using assumed rates—on the Employee Benefits website as early as possible but no later than Friday, October 28, 2022. If the online estimate tool indicates that a special (manual) calculation is necessary, requests for 2022 and 2023 estimates should be submitted using the “special request” link on or before October 28, 2022. Please provide any special handling instructions in the comment section of the special request.
For 2023 benefit estimates, the RS Plan assumes conservative interest rates in converting a participant’s life-only annuity into a single cash payment (or “lump sum”). As a result, we expect most 2023 estimates requested before mid-December may produce a lower single cash payment than one requested for any date in 2022. On Monday, August 8, updates were made to the interest rate assumptions used to estimate the value of single cash payments for 2023 and later to better reflect the current interest rate environment. As a result of that update we expect 2023 estimates prepared after August 7 to provide a better, and still conservative, estimate of 2023 single cash payment values.
However, if participants would like to receive a single cash payment estimate for 2023 using the actual 2023 interest rates, enter “hold for rates” in the online estimate tool’s “special request” link. The estimates will be sent to you after December 15, 2022, when the actual 2023 interest rates used to calculate RS Plan benefits as a single cash payment— the 30-year Treasury rate, also known as the General Agreement on Tariffs and Trade (GATT) rate, and a three-segment rate created in the Pension Protection Act of 2006—are released. Benefits administrators will be notified when they can begin to run 2023 estimates and 2023 special requests for manual calculations using the new interest rates after NRECA systems are updated.
All special requests for manual calculations submitted by October 28 will be delivered to the person requesting them as they are completed, on or before December 27, 2022.
Except for participants with a birthday in January or February 2023, manual calculation requests for both 2022 and 2023 will be limited to two calculations for all other participants. To better understand how their change in age affects their benefits, participants with January or February birthdays can request two calculations for 2023—one for just before their birthdate and one for just after their birthdate. Estimate requests for 2022 and 2023 will have priority over other future retirement or quasi-retirement estimates after 2023.
Resources for your employees
To help you with employee discussions, NRECA has developed two resources:
- A sample email template that you can use with retirement-eligible employees;
- A flier, Answers You Need: Weighing Your RS Plan Payment Options, which can help participants evaluate their RS Plan benefit options.
RS Plan participants also have access to the Personal Investment & Retirement Consulting (PIRC) team. A PIRC team member can provide personalized education to co-op employees and can be reached via email at pirc@nreca.coop or by phone at 866.673.2299, option 6.
Questions?
We are here to help you. Please contact your field representative for specific questions or concerns. Representatives in NRECA’s Member Contact Center are available Monday through Friday, 7 am – 7 pm, Central time at 866.673.2299 or via email at contactcenter@nreca.coop.