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Practitioners

Variable-Rate Premiums

These interest rates are used to value vested benefits for variable rate premium purposes as described in PBGC's regulation on Premium Rates (29 CFR Part 4006) and PBGC's premium instructions. The valuation rules are different for plan years beginning after 2007 than for plan years beginning before 2008. For years after 2007, only the rates for the standard premium funding target are provided. Further information about the rates is provided below (after the rate tables) for post-2007 plan years and pre-2008 plan years.

2014

Discount Rates for Determining the Standard Premium Funding Target
Premium Payment Years Beginning in...Small Plans using the Lookback RuleAll Other Plans
Based on Spot Segment Rates for…Spot Segment RatesBased on Spot Segment Rates for...Spot Segment Rates
FirstSecondThirdFirstSecondThird
January 2014 December 2012 1.00% 3.57% 4.77% December 2013 1.25% 4.57% 5.60%
February 2014 January 2013 1.00% 3.73% 4.89% January 2014 1.24% 4.42% 5.40%
March 2014 February 2013 0.99% 3.82% 5.02% February 2014 1.17% 4.29% 5.36%
April 2014 March 2013 0.97% 3.82% 5.11% March 2014 1.23% 4.23% 5.31%
May 2014 April 2013 0.93% 3.61% 4.88% April 2014 1.24% 4.13% 5.15%
June 2014 May 2013 0.97% 3.76% 5.01% May 2014 1.17% 3.98% 5.01%
July 2014 June 2013 1.24% 4.25% 5.43% June 2014 1.23% 4.01% 5.09%
August 2014 July 2013 1.34% 4.45% 5.44% July 2014 1.26% 3.94% 5.02%
September 2014 August 2013 1.36% 4.60% 5.58% August 2014      
October 2014 September 2013 1.40% 4.66% 5.62% September 2014      
November 2014 October 2013 1.24% 4.47% 5.52% October 2014      
December 2014 November 2013 1.19% 4.53% 5.66% November 2014      

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2013

Standard Premium Funding Target

Rates to be used for Premium Payment Years
Beginning in...

Based on Spot

Segment Rates for…

Spot Segment Rates

First Segment

Second Segment

Third Segment

January 2013

December 2012

1.00%

3.57%

4.77%

February 2013 

January 2013

1.00%

3.73%

4.89%

March 2013 

February 2013

0.99%

3.82%

5.02%

 April 2013

March 2013

0.97%

3.82%

5.11%

 May 2013

April 2013

0.93%

3.61%

4.88%

 June 2013

May 2013

0.97%

3.76%

5.01%

 July 2013

June 2013

1.24%

4.25%

5.43%

 August 2013

July 2013

1.34%

4.45%

5.44%

 September 2013

August 2013

1.36%

4.60%

5.58%

 October 2013

September 2013

1.40%

4.66%

5.62%

 November 2013

October 2013

1.24%

4.47%

5.52%

December 2013 

November 2013

1.19% 4.53% 5.66%

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2012

Standard Premium Funding Target

Rates to be used for Premium Payment Years
Beginning in...

Based on Spot

Segment Rates for…

Spot Segment Rates

First Segment

Second Segment

Third Segment

January 2012

December 2011

2.07%

4.45%

5.24%

February 2012

January 2012

1.84%

4.36%

5.19%

March 2012

February 2012

1.56%

4.27%

5.08%

April 2012

March 2012

1.57%

4.36%

5.18%

May 2012

April 2012

1.54%

4.30%

5.14%

June 2012

May 2012

1.59%

4.12%

5.04%

July 2012

June 2012

1.60%

3.97%

4.93%

August 2012

July 2012

1.22%

3.66%

4.50%

September 2012

August 2012

1.13%

3.71%

4.52%

October 2012

September 2012

1.02%

3.71%

4.67%

November 2012

October 2012

0.96%

3.57%

4.58%

December 2012

November 2012

0.97%

3.50%

4.60%

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2011

Standard Premium Funding Target

Rates to be used for Premium Payment Years
Beginning in...

Based on Spot

Segment Rates for…

Spot Segment Rates

First Segment

Second Segment

Third Segment

January 2011

December 2010

1.98%

5.23%

6.52%

February 2011

January 2011

1.93%

5.25%

6.42%

March 2011

February 2011

2.02% 5.34% 6.54%

April 2011

March 2011

1.91% 5.23% 6.46%

May 2011

April 2011

1.93% 5.23% 6.44%

June 2011

May 2011

1.72%
5.00%
6.21%

July 2011

June 2011

1.70%
4.99%
6.33%

August 2011

July 2011

1.72%
4.97%
6.28%

September 2011

August 2011

1.85%
4.62%
6.02%

October 2011

September 2011

1.98%
4.49%
5.80%

November 2011

October 2011

2.09%
4.56%
5.50%

December 2011

November 2011

1.99%
4.47%
5.26%

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2010

Standard Premium Funding Target

Rates to be used for Premium Payment Years
Beginning in...

Based on Spot

Segment Rates for…

Spot Segment Rates

First Segment

Second Segment

Third Segment

January 2010

December 2009

2.35%

5.65%

6.45%

February 2010

January 2010

2.31%

5.64%

6.47%

March 2010

February 2010

2.29%

5.77%

6.63%

April 2010

March 2010

2.29%

5.65%

6.58%

May 2010

April 2010

2.30%

5.60%

6.47%

June 2010

May 2010

2.34%

5.42%

6.26%

July 2010

June 2010

2.35%

5.35%

6.29%

August 2010

July 2010

2.06%

5.10%

6.11%

September 2010

August 2010

1.81%

4.81%

5.88%

October 2010

September 2010

1.74%

4.75%

6.03%

November 2010

October 2010

1.56%

4.73%

6.22%

December 2010

November 2010

1.65%

4.91%

6.52%

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2009

Standard Premium Funding Target

Rates to be used for Premium Payment Years
Beginning in...

Based on Spot

Segment Rates for…

Spot Segment Rates

First Segment

Second Segment

Third Segment

January 2009

December 2008

6.72%

7.12%

6.36%

February 2009

January 2009

5.20%

6.80%

6.31%

March 2009

February 2009

5.24%

7.07%

7.08%

April 2009

March 2009

5.70%

7.53%

7.85%

May 2009

April 2009

5.12%

7.15%

6.92%

June 2009

May 2009

4.27%

7.00%

6.77%

July 2009

June 2009

3.89%

6.59%

6.55%

August 2009

July 2009

3.39%

6.28%

6.47%

September 2009

August 2009

3.08%

5.94%

6.21%

October 2009

September 2009

2.73%

5.63%

6.07%

November 2009

October 2009

2.60%

5.58%

6.07%

December 2009

November 2009

2.35%

5.57%

6.29%

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2008

Standard Premium Funding Target

Rates to be used for Premium Payment Years
Beginning in...

Based on Spot

Segment Rates for…

Spot Segment Rates

First Segment

Second Segment

Third Segment

January 2008

December 2007

4.93%

6.13%

6.69%

February 2008

January 2008

4.39%

6.01%

6.72%

March 2008

February 2008

4.11%

6.18%

7.05%

April 2008

March 2008

4.28%

6.38%

6.99%

May 2008

April 2008

4.60%

6.28%

6.96%

June 2008

May 2008

4.67%

6.36%

6.77%

July 2008

June 2008

4.99%

6.64%

6.95%

August 2008

July 2008

5.16%

6.88%

7.04%

September 2008

August 2008

5.21%

6.87%

6.91%

October 2008

September 2008

5.86%

7.35%

6.88%

November 2008

October 2008

7.35%

8.61%

7.26%

December 2008

December 2008

7.11%

8.23%

7.42%

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2007

For Premium Payment Years
Beginning In . . .

Required
Interest Rate

January 2007

5.75%

February 2007

5.89%

March 2007

5.85%

April 2007

5.84%

May 2007

5.98%

June 2007

6.01%

July 2007

6.32%

August 2007

6.33%

September 2007

6.33%

October 2007

6.23%

November 2007

6.14%

December 2007

6.14%

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2006

For Premium Payment Years
Beginning In . . .

Required
Interest Rate

January 2006

4.86%

February 2006

4.80%

March 2006

4.87%

April 2006

5.01%

May 2006

5.25%

June 2006

5.35%

July 2006

5.36%

August 2006

5.36%

September 2006

5.19%

October 2006

5.06%

November 2006

5.05%

December 2006

4.90%

^ Top

2005

For Premium Payment Years
Beginning In . . .

Required
Interest Rate

January 2005

4.73%

February 2005

4.66%

March 2005

4.56%

April 2005

4.78%

May 2005

4.72%

June 2005

4.60%

July 2005

4.47%

August 2005

4.56%

September 2005

4.61%

October 2005

4.62%

November 2005

4.83%

December 2005

4.91%

^ Top

2004

For Premium Payment Years
Beginning In . . .

Required
Interest Rate

January 2004

4.94%

February 2004

4.83%

March 2004

4.79%

April 2004

4.62%

May 2004

4.98%

June 2004

5.26%

July 2004

5.25%

August 2004

5.10%

September 2004

4.95%

October 2004

4.79%

November 2004

4.73%

December 2004

4.75%

^ Top

2003

For Premium Payment Years
Beginning In . . .

Required
Interest Rate

January 2003

4.92%

February 2003

4.94%

March 2003

4.81%

April 2003

4.80%

May 2003

4.90%

June 2003

4.53%

July 2003

4.37%

August 2003

4.93%

September 2003

5.31%

October 2003

5.14%

November 2003

5.16%

December 2003

5.12%

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2002

For Premium Payment Years
Beginning In . . .

Required
Interest Rate

Jan 2002

5.48%

Feb 2002

5.45%

March 2002

5.40%

April 2002

5.71%

May 2002

5.68%

June 2002

5.65%

July 2002

5.52%

August 2002

5.39%

September 2002

5.08%

October 2002

4.76%

November 2002

4.93%

December 2002

4.96%

^ Top

2001

For Premium Payment Years
Beginning In . . .

Required
Interest Rate

Jan 2001

4.67%

Feb 2001

4.71%

Mar 2001

4.63%

Apr 2001

4.54%

May 2001

4.80%

Jun 2001

4.91%

Jul 2001

4.82%

Aug 2001

4.77%

Sep 2001

4.66%

Oct 2001

4.66%

Nov 2001

4.52%

Dec 2001

4.35%

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2000

For Premium Payment Years
Beginning In . . .

Required
Interest Rate

Jan 2000

5.40%

Feb 2000

5.64%

Mar 2000

5.30%

Apr 2000

5.14%

May 2000

4.97%

Jun 2000

5.23%

Jul 2000

5.04%

Aug 2000

4.97%

Sep 2000

4.86%

Oct 2000

4.96%

Nov 2000

4.93%

Dec 2000

4.91%

^ Top

1999

For Premium Payment Years
Beginning In . . .

Required
Interest Rate

Jan 1999

4.30%

Feb 1999

4.39%

Mar 1999

4.56%

Apr 1999

4.74%

May 1999

4.72%

Jun 1999

4.94%

Jul 1999

5.13%

Aug 1999

5.08%

Sep 1999

5.16%

Oct 1999

5.16%

Nov 1999

5.32%

Dec 1999

5.23%

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1998

For Premium Payment Years
Beginning In . . .

Required
Interest Rate

Jan 1998

5.09%

Feb 1998

4.94%

Mar 1998

5.01%

Apr 1998

5.06%

May 1998

5.03%

Jun 1998

5.04%

Jul 1998

4.85%

Aug 1998

4.83%

Sep 1998

4.71%

Oct 1998

4.42%

Nov 1998

4.26%

Dec 1998

4.46%

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1997

For Premium Payment Years
Beginning In . . .

Required
Interest Rate

Jan 1997

5.24%

Feb 1997

5.46%

Mar 1997

5.35%

Apr 1997

5.54%

May 1997

5.67%

Jun 1997

5.55%

Jul 1997

5.75%*

Aug 1997

5.53%*

Sep 1997

5.59%*

Oct 1997

5.53%*

Nov 1997

5.38%*

Dec 1997

5.19%*

* Special rules apply for Regulated Public Utility Plans. See further information about pre-2008 plan yearsbelow.

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1996

For Premium Payment Years
Beginning In . . .

Required
Interest Rate

Jan 1996

4.85%

Feb 1996

4.84%

Mar 1996

4.99%

Apr 1996

5.28%

May 1996

5.43%

Jun 1996

5.54%

Jul 1996

5.65%

Aug 1996

5.62%

Sep 1996

5.47%

Oct 1996

5.62%

Nov 1996

5.45%

Dec 1996

5.18%

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1995

For Premium Payment Years
Beginning In . . .

Required
Interest Rate

Jan 1995

6.30%

Feb 1995

6.28%

Mar 1995

6.09%

Apr 1995

5.96%

May 1995

5.89%

Jun 1995

5.56%

Jul 1995

5.26%

Aug 1995

5.38%

Sep 1995

5.49%

Oct 1995

5.24%

Nov 1995

5.10%

Dec 1995

5.01%

^ Top

1994

For Premium Payment Years
Beginning In . . .

Required
Interest Rate

Jan 1994

5.00%

Feb 1994

5.03%

Mar 1994

5.19%

Apr 1994

5.53%

May 1994

5.82%

Jun 1994

5.93%

Jul 1994

5.92%

Aug 1994

6.06%

Sep 1994

5.99%

Oct 1994

6.17%

Nov 1994

6.35%

Dec 1994

6.46%

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1993

For Premium Payment Years
Beginning In . . .

Required
Interest Rate

Jan 1993

5.95%

Feb 1993

5.87%

Mar 1993

5.67%

Apr 1993

5.46%

May 1993

5.48%

Jun 1993

5.54%

Jul 1993

5.45%

Aug 1993

5.30%

Sep 1993

5.06%

Oct 1993

4.80%

Nov 1993

4.75%

Dec 1993

4.97%

^ Top

1992

For Premium Payment Years
Beginning In . . .

Required
Interest Rate

Jan 1992

6.16%

Feb 1992

6.06%

Mar 1992

6.28%

Apr 1992

6.38%

May 1992

6.37%

Jun 1992

6.31%

Jul 1992

6.27%

Aug 1992

6.08%

Sep 1992

5.91%

Oct 1992

5.87%

Nov 1992

6.02%

Dec 1992

6.09%

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1991

For Premium Payment Years
Beginning In . . .

Required
Interest Rate

Jan 1991

6.59%

Feb 1991

6.62%

Mar 1991

6.42%

Apr 1991

6.63%

May 1991

6.57%

Jun 1991

6.62%

Jul 1991

6.78%

Aug 1991

6.76%

Sep 1991

6.51%

Oct 1991

6.36%

Nov 1991

6.34%

Dec 1991

6.34%

^ Top

1990

For Premium Payment Years
Beginning In . . .

Required
Interest Rate

Jan 1990

6.32%

Feb 1990

6.61%

Mar 1990

6.80%

Apr 1990

6.85%

May 1990

7.01%

Jun 1990

6.98%

Jul 1990

6.77%

Aug 1990

6.80%

Sep 1990

7.09%

Oct 1990

7.22%

Nov 1990

7.09%

Dec 1990

6.83%

^ Top

1989

For Premium Payment Years
Beginning In . . .

Required
Interest Rate

Jan 1989

7.21%

Feb 1989

7.14%

Mar 1989

7.21%

Apr 1989

7.34%

May 1989

7.22%

Jun 1989

7.06%

Jul 1989

6.62%

Aug 1989

6.46%

Sep 1989

6.50%

Oct 1989

6.52%

Nov 1989

6.40%

Dec 1989

6.32%

^ Top

1988

For Premium Payment Years
Beginning In . . .

Required
Interest Rate

Jan 1988

7.30%

Feb 1988

7.06%

Mar 1988

6.74%

Apr 1988

6.90%

May 1988

7.16%

Jun 1988

7.38%

Jul 1988

7.20%

Aug 1988

7.31%

Sep 1988

7.46%

Oct 1988

7.25%

Nov 1988

7.11%

Dec 1988

7.22%

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Information on valuation rules for plan years beginning after 2007

For plan years beginning after 2007, the Pension Protection Act of 2006 prescribes a new interest rate methodology to be used to determine the present value of vested benefits for purposes of the variable-rate premium. Under the new rules, either the "standard premium funding target" or the "alternative premium funding target" is determined as the present value of vested benefits. See 29 CFR § 4006.5(g) for rules on premium funding target elections.

The standard premium funding target is determined using three interest rates ("spot segment rates"), each of which applies to cash flows during specified periods. See IRC section 430(h)(2)(B) for a description of these periods. The spot segment rates are based on the yields on high quality corporate bonds as determined by the Internal Revenue Service. IRS publishes the spot segment rates monthly. For premium purposes, the applicable segment rates are the rates for the month preceding the month in which the plan year begins.

The alternative premium funding target is determined using the same rates used to determine the funding target (either segment rates or a yield curve).

 

Information on valuation rules for plan years beginning before 2008

For plan years beginning before 2008, the value of vested benefits for purposes of the variable-rate premium is determined using the "required interest rate." The required interest rate is equal to the "applicable percentage" of a specified reference rate.

For plan years beginning in 1988 through 2003, the specified reference rate is the annual yield on 30-year Treasury constant maturity securities for the month preceding the beginning of the premium payment year. For plan years beginning in 2004 through 2007, the specified reference rate is the annual rate of interest determined by the Secretary of the Treasury on amounts conservatively invested in long-term investment grade corporate bonds for the month preceding the beginning of the premium payment year.

The applicable percentage is 80 percent for plan years beginning before July 1997; 85 percent for plan years beginning after June 1997 and before 2002; 100 percent for plan years beginning in 2002 and 2003; 85 percent for plan years beginning in 2004, 2005, and 2006; and 100 percent for plan years beginning in 2007.

Special required interest rate rules apply to plan years of "regulated public utility plans" beginning between July and December 1997. Where the special rules apply, the applicable percentage is 80 percent instead of 85 percent. See PBGC's 1997 premium payment package for additional information (including instructions for "partial" regulated public utility plans).

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