Ministerial Pension Plan (MPP)
Annuity Conversion Interest Factor

The current rate effective January 5, 2012 is:

4.00%

The annuity conversion interest factor is one of several elements used to determine a participant’s monthly benefit payment. It is calculated by analyzing current data from a number of reliable sources rather than a single index or a pre-specified formula, and is intended to reflect current market conditions for setting insurance annuity payments. The sources used include, but are not limited to, interest rates on U.S. government-issued debt, interest rates for highly rated corporate bonds that comprise the Citigroup Pension Discount Curve, annuity rates set by the Pension Benefit Guarantee Corporation and market annuity rates quoted by insurance companies that sell annuity products. The General Board also considers the long-term expected rate of return for the assets supporting MPP annuities.

It is important to note that monthly annuity payments cannot be calculated by using only the annuity conversion interest factor. Additional factors must be considered, including your age, the age of your spouse or other contingent annuitant, the annuity type and the annual increase rate you’ve chosen. For a payment estimate, please use the Pension Projection calculator in Benefit Access or contact the General Board.

Please be aware that rates quoted by insurance companies often represent actual payout rates, which take into account other elements in addition to the interest factor. The best way to compare insurance products to General Board-issued annuities is to request a quote from an insurance company under the same terms used by the General Board (i.e., annuity type, contingent annuitant and annual increase rate). When the General Board calculates annuities, retired married participants typically are provided estimates for a joint and 70% survivor annuity with 2% annual increases. There are no fees or sales charges for General Board-issued annuities. If you do obtain a quote from an insurance company, be sure that the amount quoted reflects the payment of all applicable fees and sales charges.

When planning for retirement, you can assume that a higher annuity conversion interest factor will result in a higher monthly annuity payment as long as all other elements remain the same. Once your annuity has been processed, the monthly payment amount will not change (except for applicable annual increases) even if the annuity conversion interest factor increases or decreases. Please note that insurance companies offer a variety of annuity products, which may not be comparable to annuities offered by the General Board.

Beginning September 2011, the rates established in September of each year will remain in effect until February of the following year. The General Board will revise the rate in February based on market conditions, and it will remain in effect until the ensuing September. The General Board reserves the right, however, to change the rate should extreme market conditions (such as a material increase or decrease in market interest rates) warrant. As general practice, the General Board continually monitors annuity conversion issues and evaluates alternatives.

For additional information on annuities, when to start your annuity payments or how to compare General Board annuities with insurance products, please contact Ernst & Young Financial Planning Services.