In June of this year the UFT and the City agreed that all UFT represented participants in the 403b fixed income plan will have the interest rate reduced from 8.25% to 7%, the New York State minimum. In the June 22nd agreement, the UFT and the City agreed to the following language relating to this agreement:
"The City and the union agree to support legislation to provide that, effective the next business day after the enactment of the legislation, the interest to be allowed on the Tax-Deferred Annuity (TDA) accounts in the fixed-annuity savings funds of all UFT-representative participants in the Teacher Retirement System ("TRS") and the Board of Education ("BERS") retirement systems TDA program shall be 7.00% per annum".
To me, it seems as soon as the legislature passes the bill that is related to the UFT/City agreement, our fixed income TDA would be lowered to 7%. However, what confuses me is the July 16, 2009 statement in the TRS online newsletter. The TRS stated the following:
The New York State Legislature has extended the 8.25% annual interest rate for the Fixed Return Fund. This rate is retroactive to July 1 and is applicable through June 30, 2010, when it may be renewed or reset in accordance with applicable laws. We previously reported that the interest rate dropped to 7% as of July 1 because the State Legislature had not acted to extend the rate. However, this law supersedes that change, and members who participate in the Fixed Return Fund will, at this time, continue to receive interest at the annual rate of 8.25%.
Confused? I certainly am. It would appear the legislature ignored the UFT/City agreement and we are getting 8.25% in our TDA Fixed-income annuity. However, I am not totally sure this is the case. If anybody has knowledge of what our interest rate is in our TDA fixed-income annuity, please comment on my post.