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Monthly Interest Rate Statement

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Monthly Interest Rate Statement

September 17, 2020

The purpose of this summary is to provide, in one place, a summary of current interest rates that relate to various calculations required under Title IV of ERISA.  PBGC posts this summary each month, as soon as all of the new information is available. 

Rate‑specific webpages containing additional information about and historical data for each type of rate included in this summary are available via PBGC's interest rates webpage. With respect to rates PBGC calculates directly (e.g., ERISA 4022 lump sum rates), the rate-specific webpages are almost always updated on the 15th of each month.

 Rates that change each month


What rate is used for

Most current
rate(s) available

When rate is used

ERISA 4022 Lump Sum Interest Rates




These interest rates are used to determine the lump sum equivalent of a participant's benefit when PBGC trustees a single-employer plan. If the value is less than $5,000, PBGC may pay that amount in one lump sum in lieu of a monthly annuity.  

Some ongoing pension plans use these rates to determine lump sum amounts, but the vast majority do not. Individuals seeking information about the interest rates their plans use to determine lump sums should contact their plan directly.

Immediate rate - 0.00%

Deferred rates (i1, i2, and i3) - 4.00%

Deferral periods (n1 and n2) - 7 and 8 years respectively


The ERISA 4022 Lump Sum Interest Rate Web page provides information about  how these rates are used, e.g., what i1, i2, i3, n1 and n2 represent, when to use the immediate rate, etc.

  • PBGC - Plans that terminate in October 2020
  • Ongoing plans that use ERISA 4022 rates to determine lump sums - depends on plan provisions

Variable-Rate Premiums


These rates, the spot segment rates, are used to determine the variable-rate premium (VRP) unless the plan has an election in effect to use the Alternative Premium Funding Target.

These rates are determined and published by the IRS.


  • 1st segment rate - 0.52% 
  • 2nd segment rate - 2.22% 
  • 3rd segment rate - 3.03%

These are the August 2020 spot segment rates.  They are used by plans with plan years beginning in September 2020 for determining either the 2020 or 2021 VRP, depending on whether the plan uses the "lookback rule". 

The VRP interest rate web page provides additional information about applicability.


Rates that change each calendar quarter

The rates in the table below are updated in each of the March, June, September, and December Monthly Interest Rate Summaries. For all other months, the rates are identical to the prior month's Summary.



What rate is used for

Most current
rate(s) available

When rate is used

ERISA 4044 Annuities


These rates are used for determining the present value of accrued benefits on a termination basis.  

  • Select rate - 1.62% for the first 20 years following the date of plan termination
  • Ultimate rate - 1.40% thereafter.

October 1, 2020 through
December 31, 2020 valuations

Late Premium Payments


PBGC charges interest on late PBGC premiums using the IRC section 6601(a) rate (i.e., what IRS charges for late tax payments).

Late payment penalties may also apply.  See Late Payment Charges for more information.

The same rates are also used to compute certain interest charges applicable when PBGC trustees a plan (e.g., interest on required contributions unpaid as of the termination date).


Interest accrued
October 1, 2020 through
December 31, 2020

Late Withdrawal Liability


Unless rules adopted by the plan provide otherwise, this is the rate of interest multiemployer plans:

  • charge employers who have withdrawn from the plan if withdrawal liability payments are late or in default and
  • credit such employers if they overpay their withdrawal liability.


Interest charged or credited October 1, 2020 through
December 31, 2020