PERSI Reinstatement Interest Rate :. Public Employee Retirement System of Idaho

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Reinstatement Interest Rate

The reinstatement interest rate changes on an annual basis. This is the rate charged on repayment of Base Plan Separation Benefits, Waiting Periods, and Delinquent Contributions. For calendar year 2008, the reinstatement interest rate is 8.58%. The rate is derived by determining the average of the Prime Rate on June 30 of the previous 3 years and adding 1% to the 3-year average.

Once a member starts a repayment, the interest rate is locked at the rate that is in effect at that time, and interest accrues on the unpaid balance.

Note! Members who locked at the special interest rate of 4.75% in effect until February 29, 2000, must pay at least the accrued interest on the account during every calendar year or they will lose the special rate and be charged the reinstatement rate that is applicable on January 1 of the following year.

What are: Separation Benefits? Waiting Periods? Delinquent Contributions? And do I need to repay any of these?

Separation Benefit
A Separation Benefit is a lump-sum payment of your Base Plan contributions plus interest. It is only payable after you terminate PERSI-covered employment. A Separation Benefit cancels all earned Base Plan retirement credit.

It is subject to a 20% federal tax withholding unless rolled over to another eligible tax-deferred plan. It is also subject to a 10% federal excise tax if you are under age 59 1/2.

If you once again become a PERSI member you may repay the Separation Benefit plus interest to reinstate Base Plan credits.

Waiting Period
From July 1, 1965 to June 30, 1971, there was a one-year waiting period before PERSI Base Plan contributions were required. Service credit was not earned during that time.

Eligible employment during the waiting period may now be credited if contributions for this time are paid to PERSI before retirement. School teachers who did not contribute to the Teachers' Retirement System 7- 1-1965 to 7-1-1967, or who withdrew their contributions for that period cannot receive credit for that employment.

Delinquent Contributions
Delinquent Contributions are any contributions that should have been paid to the PERSI Base Plan but, for whatever reason, were not. Reasons can include: payroll reporting error, clerical error, misinterpretation of PERSI law by employers, etc. Delinquent Contributions must be paid to PERSI.

Do you need to repay these?
Repayment of Separation Benefits or Waiting Periods is voluntary. Doing so will improve your Base Plan retirement benefit by adding months of credited service. Delinquent Contributions must be paid.