Updated Loan Interest Rates

PLAN LOAN INTEREST RATE DECREASES FROM 8.25% TO 8.00%

The Dauphin County, PA Deferred Compensation Plan offers participants the opportunity to take loans against their account value.  So that you do not fall behind with your retirement income goals, you are required to pay interest on the loan.  The plan's loan interest rate is 1%+ the prime interest rate. The key point is that you are paying yourself the interest.  Essentially, you are acting as your own bank.  Below is more information on how the loan interest rate is calculated and the plan's loan provisions. These new rates take effect on September 19, 2025.

THE PRIME INTEREST RATE

You might have heard that the Federal Reserve Bank (Fed) decreased its Federal Funds Target Rate (Target Rate) recently.  The Target Rate is the suggested range of interest which one bank may charge another for overnight lending.  The Fed does not set the prime interest rate. However, once the Fed establishes the Target Rate, then U.S. banks take action to set the rate for their best or "prime" customers. Generally, a bank's prime rate is linked to the Target Rate and moves in lockstep with it. Each U.S. bank can determine its own "prime" rate that it offers customers. However, there is no central authority which sets "prime."

The loan interest rate is based upon the prime interest rate.  The Wall Street Journal (WSJ) publishes the prime rate, which is determined by surveying the thirty largest banks in order to come up with a consensus amount.  The WSJ reports changes to the prime rate when the surveyed banks have adopted a new rate, which occurred when the Fed changed its Target Rate.

The Wall Street Journal (WSJ) published a change in the prime interest rate decreasing it from 7.25 percent to 7.00 percent, effective October 30, 2025.

December Fund Changes

As part of the Plan’s ongoing due diligence process, in December, the Plan will transition its allocation models to allocation funds. Similar to the models that offer a diversified investment strategy tailored to a specific risk-return profile, allocation funds achieve the same objective but within a single fund rather than constructing a model with multiple funds. Since the models were added to the Plan years ago, allocation funds have proliferated, and there is now a wide variety of funds to choose from in each category. We believe this change will offer similar investment returns and reduce Plan expenses. Below is how the models will be mapped to the new funds:

DC Conservative Model to the BlackRock Managed Income K Fund

DC Conservative Growth Model to the American Funds Conservative Growth & Income R6 Fund

DC Moderate Model to the T. Rowe Price Capital Appreciation I Fund

DC Growth Model to the American Funds Growth & Income Portfolio R6 Fund

DC Aggressive Growth Model to the JP Morgan Investor Growth R6 Fund

There will be no changes to the Plan’s Tactical Models - the DC Tactical Conservative Model, DC Tactical Moderate Model, and DC Tactical Growth Model. Compared to other dynamic allocation funds the models are performing well and have a favorable cost structure.

The Plan will also be:

• Transitioning two existing funds to lower expense ratio share classes;

• Remove the 2010 through 2020 American Funds Target Date Retirement Funds, which have no money invested in them (the Target Date Retirement Funds will now start with 2025 instead of 2010); and

• Updating the allocations in the DC Tactical Models.

Below is a link to notice of change in investment options.

Updated Loan Interest Rates

PLAN LOAN INTEREST RATE Decreases FROM 8.50% TO 8.25%

The Dauphin County, PA Deferred Compensation Plan offers participants the opportunity to take loans against their account value.  So that you do not fall behind with your retirement income goals, you are required to pay interest on the loan.  The plan's loan interest rate is 1%+ the prime interest rate. The key point is that you are paying yourself the interest.  Essentially, you are acting as your own bank.  Below is more information on how the loan interest rate is calculated and the plan's loan provisions. These new rates take effect on September 19, 2025.

THE PRIME INTEREST RATE

You might have heard that the Federal Reserve Bank (Fed) decreased its Federal Funds Target Rate (Target Rate) recently.  The Target Rate is the suggested range of interest which one bank may charge another for overnight lending.  The Fed does not set the prime interest rate. However, once the Fed establishes the Target Rate, then U.S. banks take action to set the rate for their best or "prime" customers. Generally, a bank's prime rate is linked to the Target Rate and moves in lockstep with it. Each U.S. bank can determine its own "prime" rate that it offers customers. However, there is no central authority which sets "prime."

The loan interest rate is based upon the prime interest rate.  The Wall Street Journal (WSJ) publishes the prime rate, which is determined by surveying the thirty largest banks in order to come up with a consensus amount.  The WSJ reports changes to the prime rate when the surveyed banks have adopted a new rate, which occurred when the Fed changed its Target Rate.

The Wall Street Journal (WSJ) published a change in the prime interest rate decreasing it from 7.50 percent to 7.25 percent, effective September 18, 2025.

PLAN LOAN PROVISIONS

Any active employee may borrow money from his/her account for any reasonable purpose. Provisions of the loan program are as follows:

• You may borrow up to half of your total vested account balance for any purpose, with a minimum loan of $1,000 and a maximum loan of $50,000.

• The maximum number of loans a participant may leave outstanding at any time is two.

• You may choose a repayment schedule of up to five years, except if the loan is used to acquire your principal residence (up to 15 years). All loans will be paid back through payroll deduction.

• The interest rate charged on your loan will be 1% above the prime interest rate. All interest that you pay on your loan is credited to your account.

• A one-time, non-refundable fee of $75 plus a $25 per year administrative fee will be deducted from your loan proceeds.

• It may take three to four weeks to process your loan application, so plan accordingly.

If you have questions regarding the plan loan provisions, Contact Us.

Alerus Money Market Rates are Decreasing

Effective October 1st, 2025, the Alerus Money Market interest rate will adjust to 4.21% (4.29% APY). As of Septebmer 30th, the 1-year yield on the Alerus Money Market is 4.49%. Alerus benchmarks and sets this rate, it is subject to change at any time. Notification of any change is provided ten business days before the effective date. If you have any questions, please contact your Alerus Retirement and Benefits Service Team.

As the Federal Reserve lowers their Fed Funds Rate, it has the effect of lowering short-term rates in the financial markets. Money markets, savings accounts, and short-term Treasury bills typically follow the changes the Federal Reserve makes to short-term rates. Should the Federal Reserve continue to lower the Fed Funds Rate, then you could expect to see this money market rate decline too.

Alerus Money Market Rates are Decreasing

Effective August 1st, 2025, the Alerus Money Market interest rate will adjust to 4.20% (4.28% APY). As of July 31st, the 1-year yield on the Alerus Money Market is 4.67%. Alerus benchmarks and sets this rate, it is subject to change at any time. Notification of any change is provided ten business days before the effective date. If you have any questions, please contact your Alerus Retirement and Benefits Service Team.

As the Federal Reserve lowers their Fed Funds Rate, it has the effect of lowering short-term rates in the financial markets. Money markets, savings accounts, and short-term Treasury bills typically follow the changes the Federal Reserve makes to short-term rates. Should the Federal Reserve continue to lower the Fed Funds Rate, then you could expect to see this money market rate decline too.

Alerus Money Market Rates are Decreasing

Effective July 1st, 2025, the Alerus Money Market interest rate will adjust to 4.18% (4.26% APY). As of June 30th, the 1-year yield on the Alerus Money Market is 4.77%. Alerus benchmarks and sets this rate, it is subject to change at any time. Notification of any change is provided ten business days before the effective date. If you have any questions, please contact your Alerus Retirement and Benefits Service Team.

As the Federal Reserve lowers their Fed Funds Rate, it has the effect of lowering short-term rates in the financial markets. Money markets, savings accounts, and short-term Treasury bills typically follow the changes the Federal Reserve makes to short-term rates.

Alerus Money Market Rates are Decreasing

Effective June 1st, 2025, the Alerus Money Market interest rate will adjust to 4.19% (4.27% APY). As of May 31st, the 1-year yield on the Alerus Money Market is 4.85%. Alerus benchmarks and sets this rate, it is subject to change at any time. Notification of any change is provided ten business days before the effective date. If you have any questions, please contact your Alerus Retirement and Benefits Service Team.

Alerus Money Market Rates are Decreasing

Effective April 1st, 2025, the Alerus Money Market interest rate will adjust to 4.22% (4.30% APY). As of March 31st, the 1-year yield on the Alerus Money Market is 5.03%. Alerus benchmarks and sets this rate on a quarterly basis, however, the rate is subject to change at any time.

As the Federal Reserve lowers their Fed Funds Rate, it has the effect of lowering short-term rates in the financial markets. Money markets, savings accounts, and short-term Treasury bills typically follow the changes the Federal Reserve makes to short-term rates.

Updated Loan Interest Rates

PLAN LOAN INTEREST RATE Decreases FROM 8.75% TO 8.50%

The Dauphin County, PA Deferred Compensation Plan offers participants the opportunity to take loans against their account value.  So that you do not fall behind with your retirement income goals, you are required to pay interest on the loan.  The plan's loan interest rate is 1%+ the prime interest rate. The key point is that you are paying yourself the interest.  Essentially, you are acting as your own bank.  Below is more information on how the loan interest rate is calculated and the plan's loan provisions. These new rates take effect on November 9, 2024

THE PRIME INTEREST RATE

You might have heard that the Federal Reserve Bank (Fed) decreased its Federal Funds Target Rate (Target Rate) recently.  The Target Rate is the suggested range of interest which one bank may charge another for overnight lending.  The Fed does not set the prime interest rate. However, once the Fed establishes the Target Rate, then U.S. banks take action to set the rate for their best or "prime" customers. Generally, a bank's prime rate is linked to the Target Rate and moves in lockstep with it. Each U.S. bank can determine its own "prime" rate that it offers customers. However, there is no central authority which sets "prime."

The loan interest rate is based upon the prime interest rate.  The Wall Street Journal (WSJ) publishes the prime rate, which is determined by surveying the thirty largest banks in order to come up with a consensus amount.  The WSJ reports changes to the prime rate when the surveyed banks have adopted a new rate, which occurred when the Fed changed its Target Rate.

The Wall Street Journal (WSJ) published a change in the prime interest rate decreasing it from 7.75 percent to 7.50 percent, effective December 12, 2024..

PLAN LOAN PROVISIONS

Any active employee may borrow money from his/her account for any reasonable purpose. Provisions of the loan program are as follows:

• You may borrow up to half of your total vested account balance for any purpose, with a minimum loan of $1,000 and a maximum loan of $50,000.

• The maximum number of loans a participant may leave outstanding at any time is two.

• You may choose a repayment schedule of up to five years, except if the loan is used to acquire your principal residence (up to 15 years). All loans will be paid back through payroll deduction.

• The interest rate charged on your loan will be 1% above the prime interest rate. All interest that you pay on your loan is credited to your account.

• A one-time, non-refundable fee of $75 plus a $25 per year administrative fee will be deducted from your loan proceeds.

• It may take three to four weeks to process your loan application, so plan accordingly.

If you have questions regarding the plan loan provisions, Contact Us.

Alerus Money Market Rates are Decreasing

Effective January 1st, 2025, the Alerus Money Market interest rate will adjust to 4.51% (4.60% APY). As of December 31st, the 1-year yield on the Alerus Money Market is 5.30%. Alerus benchmarks and sets this rate on a quarterly basis, however, the rate is subject to change at any time.

As the Federal Reserve lowers their Fed Funds Rate, it has the effect of lowering short-term rates in the financial markets. Money markets, savings accounts, and short-term Treasury bills typically follow the changes the Federal Reserve makes to short-term rates.