[Federal Register: October 15, 2009 (Volume 74, Number 198)]
[Rules and Regulations]
[Page 52886-52887]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr15oc09-7]
[[Page 52886]]
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PENSION BENEFIT GUARANTY CORPORATION
29 CFR Part 4022
Benefits Payable in Terminated Single-Employer Plans; Interest
Assumptions for Valuing and Paying Benefits
AGENCY: Pension Benefit Guaranty Corporation.
ACTION: Final rule.
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SUMMARY: Pension Benefit Guaranty Corporation's regulation on Benefits
Payable in Terminated Single-Employer Plans prescribes interest
assumptions for valuing and paying certain benefits under terminating
single-employer plans. This final rule amends the benefit payments
regulation to adopt interest assumptions for plans with valuation dates
in November 2009. Interest assumptions are also published on PBGC's Web
site (http://www.pbgc.gov).
DATES: Effective November 1, 2009.
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: PBGC's regulations prescribe actuarial
assumptions--including interest assumptions--for valuing and paying
plan benefits of terminating single-employer plans covered by title IV
of the Employee Retirement Income Security Act of 1974. The interest
assumptions are intended to reflect current conditions in the financial
and annuity markets.
These interest assumptions are found in two PBGC regulations: the
regulation on Benefits Payable in Terminated Single-Employer Plans (29
CFR part 4022) and the regulation on Allocation of Assets in Single-
Employer Plans (29 CFR part 4044). Assumptions under the asset
allocation regulation are updated quarterly; assumptions under the
benefit payments regulation are updated monthly. This final rule
updates only the assumptions under the benefit payments regulation.
Two sets of interest assumptions are prescribed under the benefit
payments regulation: (1) A set for PBGC to use to determine whether a
benefit is payable as a lump sum and to determine lump-sum amounts to
be paid by PBGC (found in Appendix B to Part 4022), and (2) a set for
private-sector pension practitioners to refer to if they wish to use
lump-sum interest rates determined using PBGC's historical methodology
(found in Appendix C to Part 4022).
This amendment (1) adds to Appendix B to Part 4022 the interest
assumptions for PBGC to use for its own lump-sum payments in plans with
valuation dates during November 2009, and (2) adds to Appendix C to
Part 4022 the interest assumptions for private-sector pension
practitioners to refer to if they wish to use lump-sum interest rates
determined using PBGC's historical methodology for valuation dates
during November 2009.
The interest assumptions that PBGC will use for its own lump-sum
payments (set forth in Appendix B to part 4022) will be 2.25 percent
for the period during which a benefit is in pay status and 4.00 percent
during any years preceding the benefit's placement in pay status. In
comparison with the interest assumptions in effect for October 2009,
these interest assumptions represent a decrease of 0.25 percent in the
immediate annuity rate and are otherwise unchanged. For private-sector
payments, the interest assumptions (set forth in Appendix C to part
4022) will be the same as those used by PBGC for determining and paying
lump sums (set forth in Appendix B to part 4022).
PBGC has determined that notice and public comment on this
amendment are impracticable and contrary to the public interest. This
finding is based on the need to determine and issue new interest
assumptions promptly so that the assumptions can reflect current market
conditions as accurately as possible.
Because of the need to provide immediate guidance for the valuation
and payment of benefits in plans with valuation dates during November
2009, PBGC finds that good cause exists for making the assumptions set
forth in this amendment effective less than 30 days after publication.
PBGC has determined that this action is not a ``significant
regulatory action'' under the criteria set forth in Executive Order
12866.
Because no general notice of proposed rulemaking is required for
this amendment, the Regulatory Flexibility Act of 1980 does not apply.
See 5 U.S.C. 601(2).
List of Subjects in 29 CFR Part 4022
Employee benefit plans, Pension insurance, Pensions, Reporting and
recordkeeping requirements.
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In consideration of the foregoing, 29 CFR part 4022 is amended as
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 193, as set forth below, is
added to the table.
APPENDIX B TO PART 4022--LUMP SUM INTEREST RATES FOR PBGC 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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* * * * * * *
193 11-1-09 12-1-09 2.25 4.00 4.00 4.00 7 8
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3. In appendix C to part 4022, Rate Set 193, as set forth below, is
added to the table.
APPENDIX C TO PART 4022--LUMP SUM INTEREST RATES FOR PRIVATE-SECTOR
PAYMENTS
* * * * *
[[Page 52887]]
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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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* * * * * * *
193 11-1-09 12-1-09 2.25 4.00 4.00 4.00 7 8
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Issued in Washington, DC, on this 6th day of October 2009.
Vincent K. Snowbarger,
Acting Director, Pension Benefit Guaranty Corporation.
[FR Doc. E9-24732 Filed 10-14-09; 8:45 am]
BILLING CODE 7709-01-P