[Federal Register: October 15, 1996 (Volume 61, Number 200)]
[Notices]
[Page 53772-53773]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr15oc96-118]
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PENSION BENEFIT GUARANTY CORPORATION
Interest Assumption for Determining Variable-Rate Premium;
Interest on Late Premium Payments; Interest on Underpayments and
Overpayments of Single-Employer Plan Termination Liability and
Multiemployer Withdrawal Liability; 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 are derivable 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 home page
(http://www.pbgc.gov).
DATES: The interest rate for determining the variable-rate premium
under part 4006 applies to premium payment years beginning in October
1996. The interest assumptions for performing multiemployer plan
valuations following mass withdrawal under part 4281 apply to valuation
dates occuring in November 1996. The interest rates for late premium
payments under part 4007 and for underpayments and overpayments of
single-employer plan termination liability under part 4062 and
multiemployer withdrawal liability under part 4219 apply to interest
accruing during the fourth quarter (October through December) of 1996.
FOR FURTHER INFORMATION CONTACT: Harold J. Ashner, Assistant General
Counsel, Office of the General Counsel, Pension Benefit Guaranty
Corporation, 1200 K Street, NW., Washington, DC 20005, 202-326-4024
(202-326-4179 for TTY and TDD).
SUPPLEMENTARY INFORMATION:
Variable-rate Premiums
Section 4006(a)(3)(E)(iii)(II) of the Employee Retirement Income
Security Act of 1974 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 in determining a single-employer plan's variable-rate premium. The
rate is a specified percentage (currently 80 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 yield figure is reported in Federal
Reserve Statistical Releases G.13 and H.15.
The assumed interest rate to be used in determining variable-rate
premiums for premium payment years beginning in October 1996 (i.e., 80
percent of the yield figure for September 1996) is 5.62 percent. The
following table lists the assumed interest rates to be used in
determining variable-rate premiums for premium payment years beginning
between November 1995 and October 1996.
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The required
For premium payment years beginning in: interest rate
is:
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November 1995........................................... 5.10
December 1995........................................... 5.01
January 1996............................................ 4.85
February 1996........................................... 4.84
March 1996.............................................. 4.99
April 1996.............................................. 5.28
May 1996................................................ 5.43
June 1996............................................... 5.54
July 1996............................................... 5.65
August 1996............................................. 5.62
September 1996.......................................... 5.47
October 1996............................................ 5.62
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Late Premium Payments; Underpayments and Overpayments of Single-
employer Plan Termination Liability
Section 4007(b) of ERISA and Sec. 4007.7(a) of the PBGC's
regulation on Payment of Premiums (29 CFR part 4007) require the
payment of interest on late premium payments at the rate established
under section 6601 of the Internal Revenue Code. Similarly, Sec. 4062.7
of the PBGC's regulation on Liability for Termination of Single-
employer Plans (29 CFR part 4062) requires that interest be charged or
credited at the section 6601 rate on underpayments and overpayments of
employer liability under section 4062 of ERISA. The section 6601 rate
is established periodically (currently quarterly) by the Internal
Revenue Service. The rate applicable to the fourth quarter (October
through December) of 1996, as announced by the IRS, is 9 percent.
The following table lists the late payment interest rates for
premiums and employer liability for the specified time periods:
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Interest
From-- Through-- rate
(percent)
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10/1/89............................ 3/31/91............... 11
4/1/91............................. 12/31/91.............. 10
1/1/92............................. 3/31/92............... 9
4/1/92............................. 9/30/92............... 8
10/1/92............................ 6/30/94............... 7
7/1/94............................. 9/30/94............... 8
10/1/94............................ 3/31/95............... 9
4/1/95............................. 6/30/95............... 10
7/1/95............................. 3/31/96............... 9
4/1/96............................. 6/30/96............... 8
7/1/96............................. 12/31/96.............. 9
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Underpayments and Overpayments of Multiemployer Withdrawal
Liability
Section 4219.32(b) of the PBGC's regulation on Notice, Collection,
and Redetermination of Withdrawal Liability (29 CFR part 4219)
specifies the rate at which a multiemployer plan is to charge or credit
interest on underpayments and overpayments of withdrawal liability
under section 4219 of ERISA unless an applicable plan provision
provides otherwise. For interest accruing during any calendar quarter,
the specified rate is the average quoted prime rate on short-term
commercial loans for the fifteenth day (or the next business day if the
fifteenth day is not a business day) of the month preceding the
beginning of the quarter, as reported by the Board of Governors of the
Federal Reserve System in Statistical Release H.15 (``Selected Interest
Rates''). The rate for the fourth quarter (October through December) of
1996 (i.e., the rate reported for September 16, 1996) is 8.25 percent.
The following table lists the withdrawal liability underpayment and
overpayment interest rates for the specified time periods:
[[Page 53773]]
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Interest
From-- Through-- rate
(percent)
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4/1/90............................. 3/31/91............... 10.00
4/1/91............................. 6/30/91............... 9.00
7/1/91............................. 9/30/91............... 8.50
10/1/91............................ 12/31/91.............. 8.00
1/1/92............................. 3/31/92............... 7.50
4/1/92............................. 9/30/92............... 6.50
10/1/92............................ 6/30/94............... 6.00
7/1/94............................. 9/30/94............... 7.25
10/1/94............................ 12/31/94.............. 7.75
1/1/95............................. 3/31/95............... 8.50
4/1/95............................. 9/30/95............... 9.00
10/1/95............................ 3/31/96............... 8.75
4/1/96............................. 12/31/96.............. 8.25
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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 November 1996 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 October 1996.
Martin Slate,
Executive Director, Pension Benefit Guaranty Corporation.
[FR Doc. 96-26344 Filed 10-11-96; 8:45 am]
BILLING CODE 7708-01-P