March 2023 CARP Announcement
Dear Brothers and Sisters,
The new interest rates for the Continental Retirement Plan (CARP) are now available on Your Benefits Resources (YBR). Anyone who runs an estimate with a benefit commencement date of 7/1/2023 – 12/1/2023 will have the new rates applied.
The interest rates for lump sums payable from 7/1/2023 to 12/31/2023 are 4.99%, 5.12% and 4.96%. These are based on the IRS published three “segmented” interest rates each month. United is using the February rates published in mid-March 2023.
As a result, lump sums paid in the second half of 2023 will be lower than the lump sums paid in the first half of 2023. The following are estimated impacts:
A lump sum of $100,000 based on the rates and mortality table for the first half of 2023 would be equal to the following amounts using the rates and mortality table for the second half of 2023:
Age 50 retiree = $93,000 (7.0% lower)
Age 55 retiree = $93,000 (7.0% lower)
Age 60 retiree = $95,000 (5.0% lower)
Age 65 retiree = $96,000 (4.0% lower)
These new rates are posted on United’s Flying Together website under the Your Benefits Resource (YBR) tab as of March 31st. You will be able to run estimates after that date.
If you have any questions concerning the impact of projecting your retirement with a benefit commencement date of January 1, 2024 or later, please note that the interest rates that are used to project in the future will use the higher of an average of the segmented rates during the 24-month period from March 2021 through February 2023 or the most recent rates published by the Plan (February, 2023 rates, published in mid-March, 2023), which may or may not be reflective of current segmented rates. Since the actual interest rates for these projections are currently unknown, the system will also show estimated lump sum amounts using three segment rates that are each 0.5% or 1.0% higher or lower than the 24-month average rates. The actual interest rates that will be used to calculate your lump sum when you retire will be based on the interest rates in effect at that time.
In solidarity,
Mike Moats
IBT Airline Division
Benefits Coordinator