1. What is the Annuity Conversion Rate?

The annuity conversion rate is the interest rate that is used to convert account balances into annuity benefits. The Fund has used an above-market interest rate in this formula for many years, and will continue to convert account balances made prior to July 1, 2021 using an above-market rate. A 3 percent annuity conversion rate will be applied to contributions made and interest earned starting July 1, 2021. The YMCA Retirement Fund remains one of the best retirement plans available.

2. How do I determine my estimated monthly retirement income?

Every individual participant’s situation is different, and monthly annuity amounts will vary based on a number of factors, including your age, the age of your designated survivor, contributions and interest earned. Please log into the annuity calculator to determine an estimate of your monthly retirement income. Please note that the annuity calculator will reflect this adjustment on July 1, 2021.

3. How will my monthly retirement income compare to the financial marketplace?

The YMCA Retirement Fund remains one of the best retirement plans available in terms of providing a higher monthly retirement offering for your converted account balance.

In addition, safety and security remain core to the Fund. Throughout the Fund’s 100-year history, annuity payments have never been missed, plan participants’ retirement savings have always been protected from market volatility, and account balances have never decreased. We strive to maintain this record.

4. Why is the Fund making this adjustment?

This helps ensure the Fund’s ability to continue to pay generous retirement benefits to participants for years to come. The new structure will strengthen the Fund’s financial health and empower the Fund to continue to provide the best retirement offering for plan participants in the most responsible way for the long term.

5. Why is this necessary now?

People are living longer, interest rates are at historic lows, and the financial markets have experienced unprecedented volatility. These trends make it more challenging for the Fund to continue to achieve its objectives, and therefore, the Fund must evolve to address these trends.

As part of a thorough strategic planning process, we conducted an in-depth analysis of the Fund’s retirement offering and financial condition, and determined that a change was necessary today to ensure the Fund’s long-term health. The adjustment helps achieve this by making the Fund more flexible and aligned with the market.

6. Will there be additional adjustments in the future?

As in the past, Fund management and the Board will make adjustments when required to ensure the Fund’s sustainability for current and future generations of Y staff. We want and need the Fund to be as nimble and flexible as possible, given dynamic economic and demographic trends.

7. Are my entire retirement savings subject to this adjustment?

No. It is important to note that this change only impacts plan participants’ future contributions and interest. Account contributions made prior to July 1, 2021 are not impacted.

8. Are there any other changes?

Going forward, the interest credit rate declaration will be made each May and will be in effect for the subsequent Plan year. For example, the interest credit rate that was declared at the May 2021 Board of Trustees meeting will apply to contributions made from July 1, 2021 through June 30, 2022.

The eligibility for lifetime retirement income, also known as an annuity, for any money rolled into the Tax-Deferred Savings Plan will change. Rollovers received on or after July 1, 2021 must be in the Fund for 10 years to be eligible for lifetime retirement income.

 

Please note that the Annuity Estimate calculator
will not reflect the retirement offering adjustment until July 1, 2021.

 

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