[Federal Register: June 15, 2004 (Volume 69, Number 114)]

[Notices]               

[Page 33429]

From the Federal Register Online via GPO Access [wais.access.gpo.gov]

[DOCID:fr15jn04-102]                         



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PENSION BENEFIT GUARANTY CORPORATION



 

Required Interest Rate Assumption for Determining Variable-Rate 

Premium; Interest Assumptions for Multiemployer Plan Valuations 

Following Mass Withdrawal



AGENCY: Pension Benefit Guaranty Corporation.



ACTION: Notice of interest rates and assumptions.



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SUMMARY: This notice informs the public of the interest rates and 

assumptions to be used under certain Pension Benefit Guaranty 

Corporation regulations. These rates and assumptions are published 

elsewhere (or can be derived from rates published elsewhere), but are 

collected and published in this notice for the convenience of the 

public. Interest rates are also published on the PBGC's Web site 

(http://www.pbgc.gov).





DATES: The required interest rate for determining the variable-rate 

premium under part 4006 applies to premium payment years beginning in 

June 2004. The interest assumptions for performing multiemployer plan 

valuations following mass withdrawal under part 4281 apply to valuation 

dates occurring in July 2004.



FOR FURTHER INFORMATION CONTACT: Harold J. Ashner, Assistant General 

Counsel, Office of the General Counsel, Pension Benefit Guaranty 

Corporation, 1200 K Street, NW., Washington, DC 20005, 202-326-4024. 

(TTY/TDD users may call the Federal relay service toll-free at 1-800-
877-8339 and ask to be connected to 202-326-4024.)



SUPPLEMENTARY INFORMATION:



Variable-Rate Premiums



    Section 4006(a)(3)(E)(iii)(II) of the Employee Retirement Income 

Security Act of 1974 (ERISA) and Sec.  4006.4(b)(1) of the PBGC's 

regulation on Premium Rates (29 CFR part 4006) prescribe use of an 

assumed interest rate (the ``required interest rate'') in determining a 

single-employer plan's variable-rate premium. Pursuant to the Pension 

Funding Equity Act of 2004, for premium payment years beginning in 2004 

or 2005, the required interest rate is the ``applicable percentage'' 

(currently 85 percent) of the annual rate of interest determined by the 

Secretary of the Treasury on amounts invested conservatively in long-

term investment grade corporate bonds for the month preceding the 

beginning of the plan year for which premiums are being paid. Thus, the 

required interest rate to be used in determining variable-rate premiums 

for premium payment years beginning in June 2004 is 5.26 percent (i.e., 

85 percent of the 6.19 percent composite corporate bond rate for May 

2004 as determined by the Treasury).

    The following table lists the required interest rates to be used in 

determining variable-rate premiums for premium payment years beginning 

between July 2003 and June 2004. Note that the required interest rates 

for premium payment years beginning in July through December 2003 were 

determined under the Job Creation and Worker Assistance Act of 2002, 

and that the required interest rates for premium payment years 

beginning in January through June 2004 were determined under the 

Pension Funding Equity Act of 2004.



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                                                                 The

                                                               required

          For premium payment years beginning in:              interest

                                                               rate is:

------------------------------------------------------------------------

July 2003\*\...............................................         4.37

August 2003\*\.............................................         4.93

September 2003\*\..........................................         5.31

October 2003\*\............................................         5.14

November 2003\*\...........................................         5.16

December 2003\*\...........................................         5.12

January 2004\**\...........................................         4.94

February 2004\**\..........................................         4.83

March 2004\**\.............................................         4.79

April 2004\**\.............................................         4.62

May 2004\**\...............................................         4.98

June 2004\**\..............................................        5.26

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\*\ The required interest rates for premium payment years beginning in

  July through December 2003 were determined under the Job Creation and

  Worker Assistance Act of 2002.

\**\ The required interest rates for premium payment years beginning in

  January through June 2004 were determined under the Pension Funding

  Equity Act of 2004.



Multiemployer Plan Valuations Following Mass Withdrawal



    The PBGC's regulation on Duties of Plan Sponsor Following Mass 

Withdrawal (29 CFR part 4281) prescribes the use of interest 

assumptions under the PBGC's regulation on Allocation of Assets in 

Single-Employer Plans (29 CFR part 4044). The interest assumptions 

applicable to valuation dates in July 2004 under part 4044 are 

contained in an amendment to part 4044 published elsewhere in today's 

Federal Register. Tables showing the assumptions applicable to prior 

periods are codified in appendix B to 29 CFR part 4044.



    Issued in Washington, DC, on this 9th day of June, 2004.

Joseph H. Grant,

Deputy Executive Director and Chief Operating Officer, Pension Benefit 

Guaranty Corporation.

[FR Doc. 04-13486 Filed 6-14-04; 8:45 am]



BILLING CODE 7708-01-P