[Federal Register Volume 77, Number 94 (Tuesday, May 15, =
2012)]
[Rules and Regulations]
[Pages 28477-28478]
From the Federal Register Online via the Government Printing Office [http://www.gpo.gov/]
[FR Doc No: 2012-11708]
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PENSION BENEFIT GUARANTY CORPORATION

29 CFR Part 4022


Benefits Payable in Terminated Single-Employer Plans; Interest=20
Assumptions for Paying Benefits

AGENCY: Pension Benefit Guaranty Corporation.

ACTION: Final rule.

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SUMMARY: This final rule amends the Pension Benefit Guaranty=20
Corporation's regulation on Benefits Payable in Terminated Single-
Employer Plans to prescribe interest assumptions under the regulation=20
for valuation dates in June 2012. The interest assumptions are used for=20
paying benefits under terminating single-employer plans covered by the=20
pension insurance system administered by PBGC.

DATES: Effective June 1, 2012.

FOR FURTHER INFORMATION CONTACT: Catherine B. Klion=20
(Klion.Catherine@pbgc.gov), =
Manager, Regulatory and Policy Division,=20
Legislative and Regulatory Department, Pension Benefit Guaranty=20
Corporation, 1200 K Street, NW., Washington, DC 20005, 202-326-4024.=20
(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 regulation on Benefits Payable in=20
Terminated Single-Employer Plans (29 CFR part 4022) prescribes=20
actuarial assumptions --including interest assumptions--for paying plan=20
benefits under terminating single-employer plans covered by title IV of=20
the Employee Retirement Income Security Act of 1974. The interest=20
assumptions in the regulation are also published on PBGC's Web site=20
(http://www.pbgc.gov/).
    PBGC uses the interest assumptions in Appendix B to Part 4022 to=20
determine whether a benefit is payable as a lump sum and to determine=20
the amount to pay. Appendix C to Part 4022 contains interest=20
assumptions for private-sector pension practitioners to refer to if=20
they wish to use lump-sum interest rates determined using PBGC's=20
historical methodology. Currently, the rates in Appendices B and C of=20
the benefit payment regulation are the same.
    The interest assumptions are intended to reflect current conditions=20
in the financial and annuity markets. Assumptions under the benefit=20
payments regulation are updated monthly. This final rule updates the=20
benefit payments interest assumptions for June 2012.\1\
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    \1\ Appendix B to PBGC's regulation on Allocation of Assets in=20
Single-Employer Plans (29 CFR Part 4044) prescribes interest=20
assumptions for valuing benefits under terminating covered single-
employer plans for purposes of allocation of assets under ERISA=20
section 4044. Those assumptions are updated quarterly.
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--

    The June 2012 interest assumptions under the benefit payments=20
regulation will be 1.25 percent for the period during which a benefit=20
is in pay status and 4.00 percent during any years preceding the=20
benefit's placement in pay status. In comparison with the interest=20
assumptions in effect for May 2012, these interest assumptions=20
represent an decrease of 0.25 percent in the immediate annuity rate and=20
are otherwise unchanged.
    PBGC has determined that notice and public comment on this=20
amendment are impracticable and contrary to the public interest. This=20
finding is based on the need to determine and issue new interest=20
assumptions promptly so that the assumptions can reflect current market=20
conditions as accurately as possible.
    Because of the need to provide immediate guidance for the payment=20
of benefits under plans with valuation dates during June 2012, PBGC=20
finds that good cause exists for making the assumptions set forth in=20
this amendment effective less than 30 days after publication.
    PBGC has determined that this action is not a ``significant=20
regulatory action'' under the criteria set forth in Executive Order=20
12866.
    Because no general notice of proposed rulemaking is required for=20
this amendment, the Regulatory Flexibility Act of 1980 does not apply.=20
See 5 U.S.C. 601(2).

List of Subjects in 29 CFR Part 4022

    Employee benefit plans, Pension insurance, Pensions, Reporting and=20
recordkeeping requirements.
    In consideration of the foregoing, 29 CFR part 4022 is amended as=20
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 224, as set forth below, is=20
added to the table.

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

* * * * *

[[Page 28478]]



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                   For plans with a valuation date     Immediate         =
                        Deferred annuities (percent)
    Rate set     ----------------------------------   annuity rate  =
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-----------
                    On or after         Before         (percent)         =
   i1               i2               i3               n1               =
n2
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------
=20
                                                                      * =
* * * * * *
          224            6-1-12           7-1-12             1.25        =
     4.00             4.00             4.00                7             =
   8
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0
3. In appendix C to part 4022, Rate Set 224, as set forth below, is=20
added to the table.

Appendix C to Part 4022--Lump Sum Interest Rates for Private-Sector=20
Payments

* * * * *

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                   For plans with a valuation date     Immediate         =
                        Deferred annuities (percent)
    Rate set     ----------------------------------   annuity rate  =
-------------------------------------------------------------------------=
-----------
                    On or after         Before         (percent)         =
   i1               i2               i3               n1               =
n2
-------------------------------------------------------------------------=
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------
=20
                                                                      * =
* * * * * *
          224            6-1-12           7-1-12             1.25        =
     4.00             4.00             4.00                7             =
   8
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    Issued in Washington, DC, on this 7th day of May 2012.
Laricke Blanchard,
Deputy Director for Policy, Pension Benefit Guaranty Corporation.
[FR Doc. 2012-11708 Filed 5-14-12; 8:45 am]
BILLING CODE 7709-01-P