Pension Benefit Guaranty Corporation Amends Regulation on Benefits Payable in Terminated Single-Employer Plans

Targeted News Service

WASHINGTON, Aug. 15 -- The U.S. Pension Benefit Guaranty Corporation published the following rule in the Federal Register:

Benefits Payable in Terminated Single-Employer Plans; Interest Assumptions for Paying Benefits

A Rule by the Pension Benefit Guaranty Corporation on 08/15/2014

Publication Date: Friday, August 15, 2014

Agency: Pension Benefit Guaranty Corporation

Entry Type: Rule

Action: Final rule.

Document Citation: 79 FR 48038

Page: 48038 -48039 (2 pages)

CFR: 29 CFR 4022

Document Number: 2014-19381

Shorter URL: https://federalregister.gov/a/2014-19381

Action

Final Rule.

Summary

This final rule amends the Pension Benefit Guaranty Corporation's regulation on Benefits Payable in Terminated Single-Employer Plans to prescribe interest assumptions under the regulation for valuation dates in September 2014. The interest assumptions are used for paying benefits under terminating single-employer plans covered by the pension insurance system administered by PBGC.

DATES:

Effective Date: September 1, 2014.

FOR FURTHER INFORMATION CONTACT:

Catherine B. Klion ([email protected]), Assistant General Counsel for Regulatory Affairs, 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 regulation on Benefits Payable in Terminated Single-Employer Plans (29 CFR Part 4022) prescribes actuarial assumptions -- including interest assumptions -- for paying plan benefits under terminating single-employer plans covered by title IV of the Employee Retirement Income Security Act of 1974. The interest assumptions in the regulation are also published on PBGC's Web site (http://www.pbgc.gov).

PBGC uses the interest assumptions in Appendix B to Part 4022 to determine whether a benefit is payable as a lump sum and to determine the amount to pay. Appendix C to Part 4022 contains 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. Currently, the rates in Appendices B and C of the benefit payment regulation are the same.

The interest assumptions are intended to reflect current conditions in the financial and annuity markets. Assumptions under the benefit payments regulation are updated monthly. This final rule updates the benefit payments interest assumptions for September 2014. [1]

The September 2014 interest assumptions under the benefit payments regulation will be 1.25 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 August 2014, these interest assumptions are unchanged.

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 payment of benefits under plans with valuation dates during September 2014, 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

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.

2.In appendix B to part 4022, Rate Set 251, as set forth below, is added to the table.

Appendix B to Part 4022--Lump Sum Interest Rates for PBGC Payments

Rate set .....For plans with a valuation date .....Immediate annuity rate (percent) .....Deferred annuities (percent)

On or after .....Before .....i 1 .....i 2 .....i 3 .....n 1 .....n 2

******* ..... ..... ..... ..... ..... ..... ..... .....

251 .....9-1-14 .....10-1-14 .....1.25 .....4.00 .....4.00 .....4.00 .....7 .....8

3.In appendix C to part 4022, Rate Set 251, as set forth below, is added to the table.

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

Rate set .....For plans with a valuation date .....Immediate annuity rate (percent) .....Deferred annuities (percent)

On or after .....Before .....i 1 .....i 2 .....i 3 .....n 1 .....n 2

******* ..... ..... ..... ..... ..... ..... ..... .....

251 .....9-1-14 .....10-1-14 .....1.25 .....4.00 .....4.00 .....4.00 .....7 .....8

Issued in Washington, DC, on this 12th day of August 2014.

Philip Hertz,

Deputy General Counsel, Pension Benefit Guaranty Corporation.

*[FR Doc. 2014-19381 Filed 8-14-14; 8:45 am]

BILLING CODE 7709-02-P

[*Federal RegisterVJ 2014-08-15]

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