The new interest rates for the Continental Retirement Plan (CARP) are now available on Your Benefits Resources (YBR). Estimates run with a benefit commencement date of 7/1/2024 - 12/1/2024 will have the new rates applied. Rate changes may affect when eligible Members may decide to take their retirement distributions.
The interest rates for lump sums payable from 7/1/2024 to 12/31/2024 are 4.97%, 5.22% and 5.37%. These are based on the IRS published three “segmented” interest rates each month. These are the February rates which were published in March 2024. These new rates are posted on YBR as of March 29th and employees are able to run estimates now.
As a result of these rate published rate changes, lump sums paid in the second half of 2024 will be slightly higher than the lump sums paid in the first half of 2024.
The following is a sample of the estimated impacts:
CARP --- A lump sum of $100,000 based on the rates and mortality table for the first half of 2024 would be equal to the following amounts using the rates and mortality table for the second half of 2024:
- Age 50 retiree = $103,000 (3.0% higher)
- Age 55 retiree = $103,000 (3.0% higher)
- Age 60 retiree = $103,000 (3.0% higher)
- Age 65 retiree = $102,000 (2.0% higher)
Retirement Estimates for Commencements January 1, 2025 or later
Interest rates that are used to project retirement in the future will use the higher of an average of the segmented rates during the 24-month period from March 2022 through February 2024 or the most recent rates published by the Plan (February, 2024 rates, published in March, 2024), which may or may not be reflective of current segmented rates.
Since the actual interest rates for these projections are currently unknown, the system will also show estimated lump sum amounts using three segment rates that are each 0.5% or 1.0% higher or lower than the 24-month average rates. The actual interest rates that will be used to calculate lump sums will be based on the interest rates in effect at the time benefit is commenced.