This is the interest rate to be used to value vested benefits for variable rate premium purposes as provided for in 29 CFR 4006.

2008

The Pension Protection Act of 2006 changed the interest rate methodology to be used to determine the present value of vested benefits for purposes of the variable-rate premium (i.e., the “premium funding target”) for plan years beginning on or after January 1, 2008. Under the new rules, present value 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.

See also PBGC’s final rule implementing changes in the variable-rate premium made by the Pension Protection Act of 2006.

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%

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2007

On February 2, 2007, the Internal Revenue Service (IRS) published final regulations containing updated mortality tables for determining current liability under section 412(l)(7) of the Code and section 302(d)(7) of ERISA for plan years beginning on or after January 1, 2007. As a result, in accordance with section 4006(a)(3)(E)(iii)(II) of ERISA, the applicable percentage for premium payment years beginning on or after January 1, 2007, increases from 85 to 100 percent.

The following rates reflect this change. Technical Update 07-1 provides additional information on this issue, including information on assets and mortality assumptions to be used for 2007 variable rate premiums.

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

On August 17, 2006, the Pension Protection Act of 2006 (“PPA”) was signed into law. PPA provides that for plan years beginning in 2006, the required interest rate to be used to determine the variable rate premium is the applicable percentage (85%) of the annual rate of interest determined by the Secretary of the Treasury on amounts invested conservatively in long-term investment grade corporate bonds (the “composite corporate bond rate”) for the month preceding the beginning of the plan year for which premiums are being paid.

 

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%

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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%

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2004

The provisions of the Job Creation and Worker Assistance Act of 2002 that temporarily increased the required interest rate to be used to determine the PBGC's variable-rate premium to 100 percent (from 85%) of the annual yield on 30-year Treasury securities expired at the end of 2003.

The Pension Funding Equity Act of 2004, which was signed into law by the President on April 10, 2004, changes the rules for determining the required interest rate for premium payment years beginning in 2004 and 2005. For premium payment years beginning in 2004 and 2005, the required interest rate is the "applicable percentage" (85%) of 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 plan year for which premiums are being paid. On April 12, 2004, the Internal Revenue Service issued Notice 2004-34 announcing the composite corporate bond rates needed to determine the required interest rates for premium payment years beginning in January through April 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%

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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

The Job Creation and Worker Assistance Act of 2002 changed the Required Interest Rate for determining the variable rate premium. The Required Interest Rate is equal to the applicable percentage of the annual yield on 30-year Treasury securities for the month preceding the month in which a plan year begins. The new law changed the applicable percentage from 85 percent to 100 percent for plan years beginning after December 31, 2001, and before January 1, 2004. The Required Interest Rate assumptions published on January 15, 2002 (for plan years beginning in January 2002), and February 15, 2002 (for plan years beginning in February 2002) were recalculated using the new applicable percentage.

The Required Interest Rate assumptions for plan years beginning in March 2002 and April 2002 have been determined. (see explanation)

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%

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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%

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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 Exception Applies for Regulated Public Utility Plans

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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%

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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