[Federal Register: November 13, 2009 (Volume 74, Number 218)]

[Rules and Regulations]               

[Page 58544-58545]

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

[DOCID:fr13no09-4]                         



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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 December 2009. Interest assumptions are also published on PBGC's Web 

site (http://www.pbgc.gov).



DATES: Effective December 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 December 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 December 2009.

    The interest assumptions that PBGC will use for its own lump-sum 

payments (set forth in Appendix B to part 4022) will be 2.50 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 November 2009, 

these interest assumptions represent an increase 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 December 

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.

    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 194, 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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                                                                      * * * * * * *

          194           12-1-09           1-1-10             2.50             4.00             4.00             4.00                7                8

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[[Page 58545]]





0

3. In appendix C to part 4022, Rate Set 194, as set forth below, is 

added to the table.



Appendix C to Part 4022--Lump Sum Interest Rates for Private-Sector 

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

--------------------------------------------------------------------------------------------------------------------------------------------------------



                                                                      * * * * * * *

          194           12-1-09           1-1-10             2.50             4.00             4.00             4.00                7                8

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    Issued in Washington, DC, on this 5th day of November 2009.

Vincent K. Snowbarger,

Acting Director, Pension Benefit Guaranty Corporation.

[FR Doc. E9-27221 Filed 11-12-09; 8:45 am]



BILLING CODE 7709-01-P