[Federal Register: August 25, 2006 (Volume 71, Number 165)]
[Notices]
[Page 50477-50478]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr25au06-132]
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PENSION BENEFIT GUARANTY CORPORATION
Required Interest Rate Assumption for Determining Variable-Rate
Premium for Premium Payment Years Beginning in January Through August
2006
AGENCY: Pension Benefit Guaranty Corporation.
ACTION: Notice of interest rate assumptions.
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SUMMARY: This notice informs the public of the interest rate
assumptions to be used for determining the variable-rate premium under
part 4006 of the Pension Benefit Guaranty Corporation regulations (the
``required interest rate'') for premium payment years beginning in
January through August 2006. It reflects changes made by the Pension
Protection Act of 2006, which was signed into law on August 17, 2006.
These interest rate assumptions 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 assumption for determining the
variable-rate premium under part 4006 applies to premium payment years
beginning in January through August 2006.
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: Each month PBGC publishes a notice in the
Federal Register informing the public of the interest rates and
assumptions to be used under certain PBGC regulations. One such rate is
the required interest rate used pursuant to 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) in determining a single-employer
plan's variable-rate premium.
The Pension Funding and Equity Act of 2004 (``PFEA'') set the
required interest rate for plan years beginning in 2004 or 2005 as 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
(the ``composite corporate bond rate'') for the month preceding the
beginning of the plan year for which premiums are being paid (the
``premium payment year'').
The Pension Protection Act of 2006 (``PPA''), which was signed into
law on August 17, 2006, extended the applicability of the PFEA required
interest rate to plan years beginning in 2006 and 2007. Before PPA was
signed into law, the required interest rate for plan years beginning in
2006 was 85 percent of the annual yield on 30-year Treasury securities.
Accordingly, this was the required interest rate published each month
by the PBGC for premium payment years beginning in January though
August of 2006. This notice revises those published rates to reflect
changes made by PPA.
On August 18, 2006, the Internal Revenue Service issued Notice
2006-75, announcing the composite corporate bond rates needed to
determine the required interest rates for premium payment years
beginning in January through August 2006.
The required interest rate to be used in determining variable-rate
premiums for premium payment years beginning in January 2006 is 4.86
percent (i.e., 85 percent of the 5.72 percent composite corporate bond
rate announced in IRS Notice 2006-75 for December 2005).
The required interest rate to be used in determining variable-rate
premiums for premium payment years beginning in February 2006 is 4.80
percent (i.e., 85 percent of the 5.65 percent composite corporate bond
rate announced in IRS Notice 2006-75 for January 2006).
The required interest rate to be used in determining variable-rate
premiums for premium payment years beginning in March 2006 is 4.87
percent (i.e., 85 percent of the 5.73 percent composite corporate bond
rate announced in IRS Notice 2006-75 for February 2006).
The required interest rate to be used in determining variable-rate
premiums for premium payment years beginning in April 2006 is 5.01
percent (i.e., 85 percent of the 5.89 percent composite corporate bond
rate announced in IRS Notice 2006-75 for March 2006).
The required interest rate to be used in determining variable-rate
premiums for premium payment years beginning in May 2006 is 5.25
percent (i.e., 85 percent of the 6.18 percent composite corporate bond
rate announced in IRS Notice 2006-75 for April 2006).
The required interest rate to be used in determining variable-rate
premiums for premium payment years beginning in June 2006 is 5.35
percent (i.e., 85 percent of the 6.29 percent composite corporate bond
rate announced in IRS Notice 2006-75 for May 2006).
The required interest rate to be used in determining variable-rate
premiums for premium payment years beginning in July 2006 is 5.36
percent (i.e., 85 percent of the 6.31 percent composite corporate bond
rate announced in IRS Notice 2006-75 for June 2006).
The required interest rate to be used in determining variable-rate
premiums for premium payment years beginning in August 2006 is 5.36
percent (i.e., 85 percent of the 6.30 percent composite corporate bond
rate announced in IRS Notice 2006-75 for July 2006).
The following table lists the required interest rates to be used in
determining variable-rate premiums for premium payment years beginning
in January through August 2006.
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The required
For premium payment years beginning in . . . interest rate
is . . .
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January 2006............................................ 4.86
February 2006........................................... 4.80
March 2006.............................................. 4.87
April 2006.............................................. 5.01
May 2006................................................ 5.25
June 2006............................................... 5.35
July 2006............................................... 5.36
August 2006............................................. 5.36
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PBGC will post the revised required interest rates (listed above)
on its Web site (http://www.pbgc.gov).
[[Page 50478]]
Issued in Washington, DC, on this 23rd day of August 2006.
Vincent K. Snowbarger,
Interim Director, Pension Benefit Guaranty Corporation.
[FR Doc. E6-14210 Filed 8-24-06; 8:45 am]
BILLING CODE 7709-01-P