PBGC's regulations prescribe actuarial valuation methods and assumptions (including interest rate assumptions) to be used to determine the actuarial present value of benefits under single-employer plans in involuntary or distress terminations (29 CFR part 4044) and the value of benefits and certain assets under multiemployer plans that undergo a mass withdrawal of contributing employers (29 CFR part 4281). In each month immediately preceding the start of a new calendar quarter, PBGC publishes the interest rates to be used under those regulations for plans terminating or undergoing mass withdrawal during the next quarter.
The interest rates are intended to reflect current conditions in the annuity markets. To determine these interest rates, PBGC gathers premium rate data from insurance companies that are providing annuity contracts to terminating pension plans through a quarterly survey.
PBGC is proposing several changes to the survey distributed by ACLI:
* Addition of a question asking for specific information about the interest assumptions underlying the annuity premium rates reported in parts I and II of the survey. This information is needed to allow PBGC to better analyze annuity price data provided in the survey.
* Increases to the dollar ranges in the questions on respondents' group annuity business in part III to allow the survey to continue to capture the variability and range of business accepted by respondents as the prices of plan termination annuity contracts increase with inflation.
* Changes to the instructions to clarify that respondents should provide pricing information only for full plan terminations (and transactions priced consistently with full plan terminations), that the annuity rates provided should include reductions for investment expenses but exclude administrative expenses and reductions for competitive bidding, and that respondents should assume that plan provisions are straightforward and do not contain significant levels of anti-selection, expensive options, or subsidies.
* Addition of a confirmation that administrative expenses are excluded from pricing information and an option to comment on any exceptions. This is needed for PBGC to compare pricing information amongst survey responses when respondents are unable to completely exclude administrative expenses from pricing information.
* Consolidation and simplification of former parts III and IV into a new part III and elimination of questions asking for information PBGC no longer uses. These changes streamline and simplify the response process.
* Modification of a question asking for the volume of respondents' plan termination annuity business so that it requests annual data instead of quarterly data to reduce volatility in survey responses.
* Addition of a question soliciting feedback on how PBGC could improve the survey process.
* Addition of flexibility to conduct the survey electronically.
This voluntary survey is directed at insurance companies most, if not all, of which are members of ACLI. The survey is conducted quarterly and approximately 20 insurance companies will be asked to participate. PBGC estimates that about six insurance companies will respond to the survey each quarter, and that each survey will require approximately 30 minutes to complete and return. The total burden is estimated to be 12 hours (30 minutes per survey four surveys per year six respondents per quarter).
The existing collection of information was approved under OMB control number 1212-0030 (expires
* Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
* Evaluate the accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodologies and assumptions used;
* Enhance the quality, utility, and clarity of the information to be collected; and
* Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology, e.g. permitting electronic submission of responses.
Assistant General Counsel for Regulatory Affairs,
[FR Doc. 2021-06729 Filed 3-31-21;
BILLING CODE 7709-02-P
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