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Practitioners


July 15, 2014 Interest Rate Update

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July 15, 2014

The immediate interest rate for valuing lump sum payments for the month of August 2014 is 1.25% and the deferred interest rate I1 is 4.00%, I2 is 4.00%, and I3 is 4.00%. (The immediate interest rate for July 2014 was 1.25% for lump sum payments; the deferred interest rate I1 was 4.00%, I2 was 4.00%, and I3 was 4.00%.)

The spot first, second, and third segment rates for June 2014 are, respectively, 1.23%, 4.01%, and 5.09%. These rates are used to determine the variable rate premium for premium payment years commencing in July 2014 if (A) the plan is using the standard premium funding target and (B) the plan is not a small plan using the lookback rule (see Premium Instructions). The corresponding rates for May were, respectively, 1.17%, 3.98%, and 5.01%.

The select and ultimate interest rates for valuing annuity benefits in single-employer plans and multiemployer plans for the month of August 2014 are 3.43% for the first 20 years following the date of plan termination, and 3.66% thereafter, respectively. (The select interest rate for July 2014 was 3.43% for the first 20 years and the ultimate rate was 3.66%.)

The interest rate that PBGC will charge on employer liability, unpaid contributions, and unpaid premiums, for the calendar quarter beginning July 1, and ending September 30, 2014, is 3.00%. (The interest rate for April 1 to June 30, 2014 was 3.00%.)

The interest rate to be charged by multiemployer pension plans on withdrawal liability payments that are overdue or in default, or that is to be credited by such plans on overpayments of withdrawal liability during the calendar quarter beginning July 1, and ending September 30, 2014, is 3.25%. (The interest rate for April 1 to June 30, 2014 was 3.25%.)

This page was updated on July 15, 2014.