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Proposed Fiscal Year 2016 DROP interest rate announced

October 11, 2016

Baton Rouge – The recommended interest rate for certain Deferred Retirement Option Plan (DROP) accounts is 6.17%, according to the latest valuation report for the Teachers’ Retirement System of Louisiana (TRSL).

At its October meeting, the TRSL Board approved the valuation report presented by its actuary Shelley Johnson of Foster & Foster Actuaries and Consultants. The report includes the recommended 6.17% interest rate for DROP members who were eligible to participate in the program before January 1, 2004. These DROP accounts earn interest at TRSL’s actuarially realized rate of return, less 0.5%.

The recommended rate must be adopted by the Public Retirement Systems’ Actuarial Committee (PRSAC) before it is considered final and interest can be posted to eligible DROP accounts.  PRSAC typically meets in February or March.

The DROP interest rate for members who were eligible to participate in the program on or after January 1, 2004, earn interest at the liquid asset money market rate, less 0.25%. The average monthly Fiscal Year 2016 interest rate for these accounts is 0.0595%. Interest on these accounts is posted monthly.
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