Benefits Payable in Terminated Single-Employer Plans; Interest Assumptions for Paying Benefits
Federal Register, Volume 79 Issue 94 (Thursday, May 15, 2014)
Federal Register Volume 79, Number 94 (Thursday, May 15, 2014)
Rules and Regulations
Pages 27731-27732
From the Federal Register Online via the Government Printing Office www.gpo.gov
FR Doc No: 2014-11209
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PENSION BENEFIT GUARANTY CORPORATION
29 CFR Part 4022
Benefits Payable in Terminated Single-Employer Plans; Interest Assumptions for Paying Benefits
AGENCY: Pension Benefit Guaranty Corporation.
ACTION: Final rule.
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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 June 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 June 1, 2014.
FOR FURTHER INFORMATION CONTACT: Catherine B. Klion (Klion.Catherine@pbgc.gov), 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 June 2014.\1\
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\1\ Appendix B to PBGC's regulation on Allocation of Assets in Single-Employer Plans (29 CFR part 4044) prescribes interest assumptions for valuing benefits under terminating covered single-
employer plans for purposes of allocation of assets under ERISA section 4044. Those assumptions are updated quarterly.
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The June 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 May 2014, these interest assumptions represent a decrease of 0.25 percent in the immediate annuity rate and are otherwise 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 June 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).
Page 27732
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
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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
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In appendix B to part 4022, Rate Set 248, 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 Deferred annuities (percent)
Rate set --------------------------------------- Immediate annuity ---------------------------------------------------------------------------
On or after Before rate (percent) i1 i2 i3 n1 n2
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* * * * * * *
248 6-1-14 7-1-14 1.25 4.00 4.00 4.00 7 8
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0
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In appendix C to part 4022, Rate Set 248, 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 Deferred annuities (percent)
Rate set --------------------------------------- Immediate annuity ---------------------------------------------------------------------------
On or after Before rate (percent) i1 i2 i3 n1 n2
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* * * * * * *
248 6-1-14 7-1-14 1.25 4.00 4.00 4.00 7 8
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Issued in Washington, DC, on this 8th day of May 2014.
Judith Starr,
General Counsel, Pension Benefit Guaranty Corporation.
FR Doc. 2014-11209 Filed 5-14-14; 8:45 am
BILLING CODE 7709-02-P
