Citrus Wealth

EIX Pension Interest Rate Released

The IRS has released the interest rates that pension plans use to calculate pension benefits. The new rate is 3.12%. To compare, the rate used for 2021 is 3.03%, which is an increase of 0.09%.

For many, this interest rate partially determines the lump sum value of your pension at retirement. In general, the higher the interest rate, the lower the lump sum value. Typically those who are taking a lump sum pension desire lower rates when they are planning to retire.

For cash balance plans, this interest rate is one factor used to determine growth of the pension. Cash balance plan participants typically want this rate to go up, as this is the interest rate that may determine the credits to a cash balance pension.

We have been helping SCE employees plan for retirement for over 20 years. Feel free to reach out to us so we can discuss what the interest rate change could potentially mean to you and your retirement picture. There is no cost or obligation. https://www.raymondjamesconnect.com/ahtMsn

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