[Federal Register: May 15, 2006 (Volume 71, Number 93)]

[Notices]               

[Page 28056-28057]

From the Federal Register Online via GPO Access [wais.access.gpo.gov]

[DOCID:fr15my06-75]                         



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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 (ACRS &

.





DATES: The required interest rate for determining the variable-rate 

premium under part 4006 applies to premium payment years beginning in 

May 2006. The interest assumptions for performing multiemployer plan 

valuations following mass withdrawal under part 4281 apply to valuation 

dates occurring in June 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''). The required interest rate to be used in 

determining variable-rate premiums for premium payment years beginning 

in May 2006 is 4.30 percent (i.e., 85 percent of the 5.06 percent 

Treasury Securities Rate for April 2006).

    The Pension Funding Equity Act of 2004 (``PFEA'')--under which the



[[Page 28057]]



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 May 

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 June 2005 and May 2006.



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                                                           The required

         For premium payment years beginning in:           interest rate

                                                                is:

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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

April 2006..............................................            4.02

May 2006................................................            4.30

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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 June 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 9th day of May 2006.

Vincent K. Snowbarger,

Deputy Executive Director, Pension Benefit Guaranty Corporation.

[FR Doc. E6-7314 Filed 5-12-06; 8:45 am]



BILLING CODE 7708-01-P