Olivette pension board approves 4-month lookback for one optional payment form

The Olivette City pension board approved an amendment to the plan’s administrative provisions to change the interest-rate lookback used in one optional payment form from two months to four months and to grandfather the two-month lookback for 12 months after approval.

AJ Stoll of Econ Benefits explained the issue: under current plan language the optional-form calculation uses a two-month interest-rate lookback (for example, an August 1 effective retirement would use June rates), while IRS publication timing means June rates may not be officially available until July. That timing can compress the period for members to receive and consider their retirement-option forms. Stoll recommended a four-month lookback to provide more time to prepare and deliver forms to participants and discussed an optional annual stability period (using a single prior-month rate for the full calendar year) as an alternative.

Board members discussed standard practice and administrative safeguards. The motion recorded on the audio instructed staff to change the plan from a two-month to a four-month lookback and to include language to grandfather the existing two-month lookback for a 12-month period after the amendment becomes effective. A member moved the motion; a second was called and the board voiced 'Aye' with no opposition or abstentions audible on the record. The motion was declared passed on the audio record.

Stoll cautioned the change would be neutral in expectation across the long run—there would be winners and losers depending on interest-rate movements—but that the amendment would reduce administrative timing pressure for participants and staff. The board asked staff to draft the specific legal verbiage to implement the amendment and to include the grandfather clause in the motion language.

Next steps: staff will prepare formal amendment language for ratification consistent with the motion and the board’s requested grandfathering provision.