Ministerial Pension Plan (MPP)
Annuity Conversion Rate
The General Board uses the Citigroup Pension Discount Curve as its source for establishing the interest rate for converting Ministerial Pension Plan balances to a monthly annuity benefit payment. The Citigroup Pension Discount Curve is a high quality corporate bond interest rate curve used to calculate what it would cost today to meet forecasted future benefit payments. The curve changes monthly and the General Board will publish the new annuity conversion rate on this Web page by the 15th calendar day of the month, prior to the month for which the new rate will be effective.
Each month, the General Board monitors a variety of sources that represent market interest rates. Before adopting the Citigroup Pension Discount Curve in January 2007, the General Board had linked its annuity conversion rate to a rate published by the Pension Benefit Guarantee Corporation (PBGC). During 2006, we analyzed alternative sources of interest rates to ensure that the PBGC interest rate used to calculate annuity benefit payments was the best representation of market annuity interest rates and provided our participants with a fair benefit payment.
In mid-December 2006, we saw the PBGC rates take wide swings that were not reflected elsewhere in the market, and this concerned us. As a result of our review, the General Board decided to use the Citigroup Pension Discount Curve to derive the annuity conversion interest rate, going forward. We believe this curve is a reasonable proxy for the level of market interest rates, and a more reliable source for us in establishing annuity conversion rates. As general practice, the General Board continually monitors annuity conversion issues and evaluates alternatives.
| Month |
MPP and Pre-1982
Annuity Conversion Rate |
| August 2008 |
6.65% |
| July 2008 |
6.59% |
| June 2008 |
6.36% |
| May 2008 |
6.47% |
| April 2008 |
6.34% |
| March 2008 |
6.19% |
| February 2008 |
6.25% |
| January 2008 |
6.13% |
| December 2007 |
6.12% |
| November 2007 |
6.16% |
| October 2007 |
6.21% |
| September 2007 |
6.32% |
| August 2007 |
6.22% |
| July 2007 |
6.05% |
| June 2007 |
5.86% |
| May 2007 |
5.92% |
| April 2007 |
5.68% |
| March 2007 |
5.86% |
| February 2007 |
5.78% |
| January 2007 |
5.60% |
| December 2006 |
6.30% |
| November 2006 |
6.20% |
| October 2006 |
6.50% |
| September 2006 |
6.70% |
| August 2006 |
6.90% |
| July 2006 |
6.80% |
| June 2006 |
6.70% |
| May 2006 |
6.40% |
| April 2006 |
6.10% |
| March 2006 |
6.20% |
| February 2006 |
6.10% |
| January 2006 |
6.20% |
| December 2005 |
4.50% |
| November 2005 |
4.20% |
| October 2005 |
4.00% |
| September 2005 |
4.10% |
| August 2005 |
3.90% |
| July 2005 |
4.10% |
| June 2005 |
4.20% |
| May 2005 |
4.40% |
| April 2005 |
4.30% |
| March 2005 |
4.30% |
| February 2005 |
4.50% |
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