[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] ----------------------------------------------------------------------- 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. ----------------------------------------------------------------------- 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\ -------------------------------------------------------------------------= -- \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. -------------------------------------------------------------------------= -- 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]] -------------------------------------------------------------------------= -------------------------------------------------------------------------= ------ For plans with a valuation date Immediate = Deferred annuities (percent) Rate set ---------------------------------- annuity rate = -------------------------------------------------------------------------= ----------- On or after Before (percent) = i1 i2 i3 n1 = n2 -------------------------------------------------------------------------= -------------------------------------------------------------------------= ------ =20 * = * * * * * * 224 6-1-12 7-1-12 1.25 = 4.00 4.00 4.00 7 = 8 -------------------------------------------------------------------------= -------------------------------------------------------------------------= ------ 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 * * * * * -------------------------------------------------------------------------= -------------------------------------------------------------------------= ------ For plans with a valuation date Immediate = Deferred annuities (percent) Rate set ---------------------------------- annuity rate = -------------------------------------------------------------------------= ----------- On or after Before (percent) = i1 i2 i3 n1 = n2 -------------------------------------------------------------------------= -------------------------------------------------------------------------= ------ =20 * = * * * * * * 224 6-1-12 7-1-12 1.25 = 4.00 4.00 4.00 7 = 8 -------------------------------------------------------------------------= -------------------------------------------------------------------------= ------ 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