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This page has not been translated. Please go to PBGC.gov's Spanish home page for more information available in Spanish.

Esta página no ha sido traducida. Por favor vaya a la página principal del sitio de español de PBGC para ver información disponible en español.

# Variable-Rate Premiums

April 15, 2024

These interest rates are used to value vested benefits for variable rate premium purposes as described in PBGC's regulation on Premium Rates (29 CFR Part 4006) and PBGC's premium instructions. The valuation rules are different for plan years beginning after 2007 than for plan years beginning before 2008. For years after 2007, only the rates for the standard premium funding target are provided. Further information about the rates is provided below (after the rate tables) for post-2007 plan years and pre-2008 plan years.

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## 2024

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## 1998

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## 1997

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* Special rules apply for Regulated Public Utility Plans. See further information about pre-2008 plan yearsbelow.

 

## 1996

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## 1995

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## 1994

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### Information on valuation rules for plan years beginning after 2007

For plan years beginning after 2007, the Pension Protection Act of 2006 prescribes a new interest rate methodology to be used to determine the present value of vested benefits for purposes of the variable-rate premium. Under the new rules, either the "standard premium funding target" or the "alternative premium funding target" is determined as the present value of vested benefits. See 29 CFR § 4006.5(g) for rules on premium funding target elections.

The standard premium funding target is determined using three interest rates ("spot segment rates"), each of which applies to cash flows during specified periods. See IRC section 430(h)(2)(B) for a description of these periods. The spot segment rates are based on the yields on high quality corporate bonds as determined by the Internal Revenue Service. IRS publishes the spot segment rates monthly. For premium purposes, the applicable segment rates are the rates for the month preceding the month in which the plan year begins.

The alternative premium funding target is determined using the same rates used to determine the funding target (either segment rates or a yield curve).

### Information on valuation rules for plan years beginning before 2008

For plan years beginning before 2008, the value of vested benefits for purposes of the variable-rate premium is determined using the "required interest rate." The required interest rate is equal to the "applicable percentage" of a specified reference rate.

For plan years beginning in 1988 through 2003, the specified reference rate is the annual yield on 30-year Treasury constant maturity securities for the month preceding the beginning of the premium payment year. For plan years beginning in 2004 through 2007, the specified reference rate is the annual rate of interest determined by the Secretary of the Treasury on amounts conservatively invested in long-term investment grade corporate bonds for the month preceding the beginning of the premium payment year.

The applicable percentage is 80 percent for plan years beginning before July 1997; 85 percent for plan years beginning after June 1997 and before 2002; 100 percent for plan years beginning in 2002 and 2003; 85 percent for plan years beginning in 2004, 2005, and 2006; and 100 percent for plan years beginning in 2007.

Special required interest rate rules apply to plan years of "regulated public utility plans" beginning between July and December 1997. Where the special rules apply, the applicable percentage is 80 percent instead of 85 percent. See PBGC's 1997 premium payment package for additional information (including instructions for "partial" regulated public utility plans).