[Federal Register: March 15, 2006 (Volume 71, Number 50)]
[Notices]
[Page 13437]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr15mr06-177]
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PENSION BENEFIT GUARANTY CORPORATION
Required Interest Rate Assumption for Determining Variable-Rate
Premium for Single-Employer Plans; 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
March 2006. The interest assumptions for performing multiemployer plan
valuations following mass withdrawal under part 4281 apply to valuation
dates occurring in April 2006.
FOR FURTHER INFORMATION CONTACT: Catherine B. Klion, Attorney,
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:
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. The required interest
rate is the ``applicable percentage'' (currently 85 percent) of the
annual yield on 30-year Treasury securities for the month preceding the
beginning of the plan year for which premiums are being paid (the
``premium payment year''). (After a five-year hiatus, the Treasury
Department issued 30-year securities during February 2006. To take
yields on the new securities into account, the Internal Revenue Service
has determined the annual yield on 30-year Treasury securities for
February 2006 to be the average of the yield on the 30-year Treasury
bond maturing in February 2031 determined each business day in February
2006 through February 8, 2006, and the yield on the 30-year Treasury
bond maturing in February 2036 determined each business day for the
balance of February 2006. The required interest rate to be used in
determining variable-rate premiums for premium payment years beginning
in March 2006 is 3.89 percent (i.e., 85 percent of the 4.58 percent
Treasury securities rate for February 2006).
The Pension Funding Equity Act of 2004 (``PFEA'')--under which the
required interest rate is 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--applies only for premium payment years beginning in 2004 or
2005. Congress is considering legislation that would extend the PFEA
rate for one more year. If legislation that changes the rules for
determining the required interest rate for plan years beginning in
March 2006 is adopted, the PBGC will promptly publish a Federal
Register notice with the new rate.
The following table lists the required interest rates to be used in
determining variable-rate premiums for premium payment years beginning
between April 2005 and March 2006.
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The
required
For premium payment years beginning in: interest
rate is:
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April 2005................................................... 4.78
May 2005..................................................... 4.72
June 2005.................................................... 4.60
July 2005.................................................... 4.47
August 2005.................................................. 4.56
September 2005............................................... 4.61
October 2005................................................. 4.62
November 2005................................................ 4.83
December 2005................................................ 4.91
January 2006................................................. 3.95
February 2006................................................ 3.90
March 2006................................................... 3.89
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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 April 2006 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 8th day of March 2006.
Vincent K. Snowbarger,
Deputy Executive Director, Pension Benefit Guaranty Corporation.
[FR Doc. E6-3699 Filed 3-14-06; 8:45 am]
BILLING CODE 7709-01-P