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Rule

Benefits Payable in Terminated Single-Employer Plans; Interest Assumptions for Paying Benefits

A Rule by the Pension Benefit Guaranty Corporation on 11/15/2010

Document Details

Information about this document as published in the Federal Register.

Printed version:
PDF
Publication Date:
11/15/2010
Agency:
Pension Benefit Guaranty Corporation
Dates:
Effective December 1, 2010.
Effective Date:
12/01/2010
Document Type:
Rule
Document Citation:
75 FR 69588
Page:
69588-69589 (2 pages)
CFR:
29 CFR 4022
Document Number:
2010-28570
Document Details
Published Document

This document has been published in the Federal Register. Use the PDF linked in the document sidebar for the official electronic format.

Start Preamble

AGENCY:

Pension Benefit Guaranty Corporation.

ACTION:

Final rule.

SUMMARY:

This final rule amends Pension Benefit Guaranty Corporation's regulation on Benefits Payable in Terminated Single-Employer Plans to prescribe interest assumptions under the regulation for valuation dates in December 2010. Interest assumptions are also published on PBGC's Web site (http://www.pbgc.gov).

DATES:

Effective December 1, 2010.

Start Further Info

FOR FURTHER INFORMATION CONTACT:

Catherine B. Klion, Manager, Regulatory and Policy Division, Legislative and Regulatory Department, Pension Benefit Guaranty Corporation, 1200 K Street, NW., Washington, DC 20005, 202-326-4024. (TTY/TDD users may call the Federal relay service toll-free at 1-800-877-8339 and ask to be connected to 202-326-4024.)

End Further Info End Preamble Start Supplemental Information

SUPPLEMENTARY INFORMATION:

PBGC's regulation on Benefits Payable in Terminated Single-Employer Plans (29 CFR part 4022) prescribes actuarial assumptions—including interest assumptions—for paying plan benefits under terminating single-employer plans covered by title IV of the Employee Retirement Income Security Act of 1974.

PBGC uses the interest assumptions in Appendix B to Part 4022 to determine whether a benefit is payable as a lump sum and to determine the amount to pay. Appendix C to Part 4022 contains interest assumptions for private-sector pension practitioners to refer to if they wish to use lump-sum interest rates determined using PBGC's historical methodology. Currently, the rates in Appendices B and C of the benefit payment regulation are the same.

The interest assumptions are intended to reflect current conditions in the financial and annuity markets. Assumptions under the benefit payments regulation are updated monthly. This final rule updates the benefit payments interest assumptions for December 2010.[1]

The December 2010 interest assumptions under the benefit payments regulation will be 2.25 percent for the period during which a benefit is in pay status and 4.00 percent during any years preceding the benefit's placement in pay status. In comparison with the interest assumptions in effect for November 2010, these interest assumptions represent an increase of 0.50 percent in the immediate annuity rate and are otherwise unchanged.

PBGC has determined that notice and public comment on this amendment are impracticable and contrary to the public interest. This finding is based on the need to determine and issue new interest assumptions promptly so that the assumptions can reflect current market conditions as accurately as possible.

Because of the need to provide immediate guidance for the payment of benefits under plans with valuation dates during December 2010, PBGC finds that good cause exists for making the assumptions set forth in this amendment effective less than 30 days after publication.

PBGC has determined that this action is not a “significant regulatory action” Start Printed Page 69589under the criteria set forth in Executive Order 12866.

Because no general notice of proposed rulemaking is required for this amendment, the Regulatory Flexibility Act of 1980 does not apply. See 5 U.S.C. 601(2).

Start List of Subjects

List of Subjects in 29 CFR Part 4022

End List of Subjects Start Amendment Part

In consideration of the foregoing,

End Amendment Part Start Part

PART 4022—BENEFITS PAYABLE IN TERMINATED SINGLE-EMPLOYER PLANS

End Part Start Amendment Part

1. The authority citation for part 4022 continues to read as follows:

End Amendment Part Start Authority

Authority: 29 U.S.C. 1302, 1322, 1322b, 1341(c)(3)(D), and 1344.

End Authority Start Amendment Part

2. In appendix B to part 4022, Rate Set 206, as set forth below, is added to the table.

End Amendment Part

Appendix B to Part 4022—Lump Sum Interest Rates For PBGC Payments

* * * * *
Rate setFor plans with a valuation dateImmediate annuity rate (percent)Deferred annuities (percent)
On or afterBeforei 1i 2i 3n 1n 2
 
*         *         *         *         *         *         *
20612-1-101-1-112.254.004.004.0078
Start Amendment Part

3. In appendix C to part 4022, Rate Set 206, as set forth below, is added to the table.

End Amendment Part

Appendix C to Part 4022—Lump Sum Interest Rates For Private-Sector Payments

* * * * *
Rate setFor plans with a valuation dateImmediate annuity rate (percent)Deferred annuities (percent)
On or afterBeforei 1i 2i 3n 1n 2
 
*         *         *         *         *         *         *
20612-1-101-1-112.254.004.004.0078
Start Signature

Issued in Washington, DC, on November 8, 2010.

Vincent K. Snowbarger,

Deputy Director for Operations, Pension Benefit Guaranty Corporation.

End Signature End Supplemental Information

Footnotes

1.  Appendix B to PBGC's regulation on Allocation of Assets in Single-Employer Plans (29 CFR Part 4044) prescribes interest assumptions for valuing benefits under terminating covered single-employer plans for purposes of allocation of assets under ERISA section 4044. Those assumptions are updated quarterly.

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[FR Doc. 2010-28570 Filed 11-12-10; 8:45 am]

BILLING CODE 7709-01-P

Published Document