[Federal Register: August 13, 2010 (Volume 75, Number 156)]
[Rules and Regulations]               
[Page 49407-49408]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr13au10-12]                         

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PENSION BENEFIT GUARANTY CORPORATION

29 CFR Part 4022

 
Benefits Payable in Terminated Single-Employer Plans; Interest 
Assumptions for Valuing and Paying Benefits

AGENCY: Pension Benefit Guaranty Corporation.

ACTION: Final rule.

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SUMMARY: Pension Benefit Guaranty Corporation's regulation on Benefits 
Payable in Terminated Single-Employer Plans prescribes interest 
assumptions for valuing and paying certain benefits under terminating 
single-employer plans. This final rule amends the benefit payments 
regulation to adopt interest assumptions for plans with valuation dates 
in September 2010. Interest assumptions are also published on PBGC's 
Web site (http://www.pbgc.gov).

DATES: Effective September 1, 2010.

FOR FURTHER INFORMATION CONTACT: Catherine B. Klion, Manager, 
Regulatory and Policy Division, Legislative and Regulatory Department, 
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: PBGC's regulations prescribe actuarial 
assumptions--including interest assumptions--for valuing and paying 
plan benefits of terminating single-employer plans covered by title IV 
of the Employee Retirement Income Security Act of 1974. The interest 
assumptions are intended to reflect current conditions in the financial 
and annuity markets.
    These interest assumptions are found in two PBGC regulations: The 
regulation on Benefits Payable in Terminated Single-Employer Plans (29 
CFR part 4022) and the regulation on Allocation of Assets in Single-
Employer Plans (29 CFR part 4044). Assumptions under the asset 
allocation regulation are updated quarterly; assumptions under the 
benefit payments regulation are updated monthly. This final rule 
updates only the assumptions under the benefit payments regulation.
    Two sets of interest assumptions are prescribed under the benefit 
payments regulation: (1) A set for PBGC to use to determine whether a 
benefit is payable as a lump sum and to determine lump-sum amounts to 
be paid by PBGC (found in Appendix B to Part 4022), and (2) a set for 
private-sector pension practitioners to refer to if they wish to use 
lump-sum interest rates determined using PBGC's historical methodology 
(found in Appendix C to Part 4022).
    This amendment (1) adds to Appendix B to Part 4022 the interest 
assumptions for PBGC to use for its own lump-sum payments in plans with 
valuation dates during September 2010, and (2) adds to Appendix C to 
Part 4022 the interest assumptions for private-sector pension 
practitioners to refer to if they wish to use lump-sum interest rates 
determined using PBGC's historical methodology for valuation dates 
during September 2010.
    The interest assumptions that PBGC will use for its own lump-sum 
payments (set forth in Appendix B to Part 4022) will be 2.25 percent 
for the period during which a benefit is in pay status and 4.00 percent 
during any years preceding the benefit's placement in pay status. In 
comparison with the interest assumptions in effect for August 2010, 
these interest assumptions are unchanged. For private-sector payments, 
the interest assumptions (set forth in Appendix C to part 4022) will be 
the same as those used by PBGC for determining and paying lump sums 
(set forth in Appendix B to Part 4022).

[[Page 49408]]

    PBGC has determined that notice and public comment on this 
amendment are impracticable and contrary to the public interest. This 
finding is based on the need to determine and issue new interest 
assumptions promptly so that the assumptions can reflect current market 
conditions as accurately as possible.
    Because of the need to provide immediate guidance for the valuation 
and payment of benefits in plans with valuation dates during September 
2010, PBGC finds that good cause exists for making the assumptions set 
forth in this amendment effective less than 30 days after publication.
    PBGC has determined that this action is not a ``significant 
regulatory action'' under the criteria set forth in Executive Order 
12866.
    Because no general notice of proposed rulemaking is required for 
this amendment, the Regulatory Flexibility Act of 1980 does not apply. 
See 5 U.S.C. 601(2).

List of Subjects in 29 CFR Part 4022

    Employee benefit plans, Pension insurance, Pensions, Reporting and 
recordkeeping requirements.

0
In consideration of the foregoing, 29 CFR Part 4022 is amended as 
follows:

PART 4022--BENEFITS PAYABLE IN TERMINATED SINGLE-EMPLOYER PLANS

0
1. The authority citation for Part 4022 continues to read as follows:

    Authority:  29 U.S.C. 1302, 1322, 1322b, 1341(c)(3)(D), and 
1344.


0
2. In appendix B to Part 4022, Rate Set 203, is added to the table, as 
set forth below:

Appendix B to Part 4022--Lump Sum Interest Rates For PBGC Payments

* * * * *

--------------------------------------------------------------------------------------------------------------------------------------------------------
                   For plans with a valuation date     Immediate                                 Deferred annuities (percent)
    Rate set     ----------------------------------   annuity rate  ------------------------------------------------------------------------------------
                    On or after         Before         (percent)            i1               i2               i3               n1               n2
--------------------------------------------------------------------------------------------------------------------------------------------------------

                                                                      * * * * * * *
--------------------------------------------------------------------------------------------------------------------------------------------------------
          203            9-1-10          10-1-10             2.25             4.00             4.00             4.00                7                8
--------------------------------------------------------------------------------------------------------------------------------------------------------


0
3. In appendix C to Part 4022, Rate Set 203, is added to the table, as 
set forth below:

Appendix C to Part 4022--Lump Sum Interest Rates for Private-Sector 
Payments

* * * * *

--------------------------------------------------------------------------------------------------------------------------------------------------------
                   For plans with a valuation date     Immediate                                 Deferred annuities (percent)
    Rate set     ----------------------------------   annuity rate  ------------------------------------------------------------------------------------
                    On or after         Before         (percent)            i1               i2               i3               n1               n2
--------------------------------------------------------------------------------------------------------------------------------------------------------

                                                                      * * * * * * *
--------------------------------------------------------------------------------------------------------------------------------------------------------
          203            9-1-10          10-1-10             2.25             4.00             4.00             4.00                7                8
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    Issued in Washington, DC, on this 6th day of August 2010.
Vincent K. Snowbarger,
Deputy Director for Operations, Pension Benefit Guaranty Corporation.
[FR Doc. 2010-20000 Filed 8-12-10; 8:45 am]
BILLING CODE 7709-01-P