Pension Rates – Assumptions under Review

The State Actuary has recently reviewed the economic and demographic assumptions used to set pension rates. Of particular interest is a preliminary recommendation to the Pension Funding Council – the body tasked with setting rates, of lowering the expected interest earnings from 8% to 7.75%. The 8% figure is long standing and while this may not seem significant, a small change in interest earnings does call for an increase in the rates. The Pension Funding Council needs to make a final decision on the assumptions, including the interest earnings, by the end of October of this year. The new assumptions will be used to establish rates beginning in July of 09.

We provide you this information now as you finalize your 2008 budget just to remind you we expect pension rates to continue to grow over the coming years.

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