September 22, 2016 Interest Rate Update
September 22, 2016 Sign up to receive the Monthly Interest Rate Summary email
For Lump Sum Payments
The immediate interest rate for valuing lump sum payments for the month of October 2016 is 0.50% and the deferred interest rate I1 is 4.00%, I2 is 4.00%, and I3 is 4.00%.
For Variable-Rate Premiums
The spot segment rates are published by the IRS each month (see the IRS webpage). The spot segment rates for August 2016 are used to determine the variable rate premium for premium payment years commencing in September 2016 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).
For ERISA 4044 Annuities
The select and ultimate interest rates for valuing annuity benefits in single-employer plans and multiemployer plans for the month of October 2016 are 1.98% for the first 20 years following the date of plan termination, and 2.67% thereafter.
For Late Premium Payments
The interest rate that PBGC will charge on employer liability, unpaid contributions, and unpaid premiums, for the calendar quarter beginning October 1, and ending December 31, 2016, is 4.00%.
For Overdue or Defaulted Withdrawal Liability
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 October 1, and ending December 31, 2016, is 3.50%.
This page was updated on September 22, 2016.