Rate Watch 2018 – January

If you followed along with us last year, you may remember our Rate Watch 2017 articles where we tracked the interest rate used for the Southern California Edison grandfathered pension.

Rate Watch 2017 – August
Rate Watch 2017 – July
Rate Watch 2017 – June
Rate Watch 2017 – May

Since our last Rate Watch post in September 2017, we wanted to write a quick recap article of the last few months of interest rate changes as we look towards the official announcement in the fall.

Edison uses the minimum present value third segment rate for the grandfathered pension plan. The August rate is the one that is specifically used for the plan’s lump sum value calculation, and the official announcement is made by SCE to its employees in late September or early October.

Rate Watch January 2018 Chart

The rule of thumb with the pension is: when interest rates decrease, the value of your lump sum payout increases and vice versa.

Since August, we have seen the rate fall from 4.36 down to 4.11. While it is still very early in the year, and this number does not directly impact lump sum values for the pension, we find it important to keep track of where the number is at and where it could be heading towards the fall.

If you think that retirement is on the horizon and want to make sure you maximize your pension benefit, then schedule a free consultation to learn what we do for SCE employees and how we have helped 100’s of them retire with confidence.

*These are not current plan rates for Southern California Edison’s pension plan, they are minimum present value third segment rates from the IRS. Official plan rates are derived from the minimum present value segment rates table (https://www.irs.gov/retirement-plans/minimum-present-value-segment-rates) . Plan rate changes are made by Southern California Edison on an annual basis.

Joe OcchipintiJoe Occhipinti
Wealth Advisor
Warren Street Wealth Advisors





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