Federal Register / Vol. 75, No. 156 / Friday, August 13, 2010 / Rules and Regulations 49407 

deductions on its debt instrument are subject 

to deferral under section 108(i)(2)(A). 

However, because only a portion of the 

proceeds from P’s debt instrument are used 

by S to reacquire its applicable debt 

instrument, only a portion of P’s total OID 

deductions will be deferred under section 

108(i)(2)(A). See section 108(i)(2)(B). 

Accordingly, a maximum of $17,500 ($40,000 

× $70,000/$160,000) of P’s $40,000 total OID 

deductions is subject to deferral under 

section 108(i)(2)(A). Under paragraph (b) of 

this section, the amount of P’s deferred OID 

deduction each taxable year under section 

108(i)(2)(A) is equal to the product of the 

amount of OID that accrues in the taxable 

year under section 1272 for the debt 

instrument and a fraction ($70,000/ 

$160,000). As a result, P’s deferred OID 

deductions are the following amounts: 

$4,015.99 for 2010 ($ 9,179.40 × $70,000/ 

$160,000); $4,246.39 for 2011 ($9,706.04 × 

$70,000/$160,000); $4,490.01 for 2012 

($10,262.88 × $70,000/$160,000); and 

$4,747.61 for 2013 ($10,851.68 × $70,000/ 

$160,000). 

Example 2. (i) Facts. The facts are the same 

as in Example 1, except that S makes a 

section 108(i) election for only $10,000 of the 

$30,000 of COD income. 

(ii) Analysis. The maximum amount of P’s 

deferred OID deductions under section 

108(i)(2)(A) is $10,000 rather than $17,500 

because S made a section 108(i) election for 

only $10,000 of the $30,000 of COD income. 

Under section 108(i)(2)(A), because the 

amount of OID that accrues prior to 2014 

attributable to the portion of the debt 

instrument issued to indirectly reacquire S’s 

applicable debt instrument under paragraph 

(b) of this section ($17,500) exceeds the 

amount of deferred COD income under 

section 108(i) ($10,000), P’s deferred OID 

deductions are the following amounts: 

$4,015.99 for 2010; $4,246.39 for 2011; 

$1,737.62 for 2012; and $0 for 2013. 

Example 3. (i) Facts. The facts are the same 

as in Example 1, except that P pays $200,000 

in cash to the lenders/holders on December 

31, 2012, to retire the debt instrument. P did 

not directly or indirectly obtain the funds to 

retire the debt instrument from the issuance 

of another debt instrument with OID. 

(ii) Analysis. Under paragraph (c)(1) of this 

section, the retirement of P’s debt instrument 

is not an acceleration event for the deferred 

OID deductions of $4,015.99 for 2010, 

$4,246.39 for 2011, and $4,490.01 for 2012. 

Except as provided in § 1.108(i)–1T(b)(4), 

these amounts will be taken into account 

during the inclusion period. P, however, paid 

a repurchase premium of $10,851.68 in 2012 

($200,000 minus the adjusted issue price of 

$189,148.32) to retire the debt instrument. If 

otherwise allowable, P may deduct this 

amount in 2012 under § 1.163–7(c). 

(e) Effective/applicability dates. For 

effective/applicability dates, see 

§ 1.108(i)–0T(b). 

(f) Expiration date. This section 

expires August 9, 2013. 

PART 602—OMB CONTROL NUMBERS 

UNDER THE PAPERWORK 

REDUCTION ACT 

■ Par. 5.The authority citation for part 

602 continues to read as follows: 

Authority: 26 U.S.C. 7805. 

■ Par. 6. In § 602.101, paragraph (b) is 

amended by adding the following entry 

in numerical order to the table to read 

as follows: 

§ 602.101 OMB Control numbers. 

* * * * * 

(b) * * * 

CFR part or section where 

identified and described 

Current OMB 

control No. 

* * * * * 

1.108(i)–1T ........................... 1545–2147 

* * * * * 

* * * * * 

Steven T. Miller, 

Deputy Commissioner for Services and 

Enforcement. 

Approved: August 6, 2010. 

Michael Mundaca, 

Assistant Secretary of the Treasury (Tax 

Policy). 

[FR Doc. 2010–20060 Filed 8–11–10; 11:15 am] 

BILLING CODE 4830–01–P 

PENSION BENEFIT GUARANTY 

CORPORATION 

29 CFR Part 4022 

Benefits Payable in Terminated SingleEmployer Plans; Interest Assumptions 

for Valuing and Paying Benefits 

AGENCY: Pension Benefit Guaranty 

Corporation. 

ACTION: Final rule. 

SUMMARY: Pension Benefit Guaranty 

Corporation’s regulation on Benefits 

Payable in Terminated Single-Employer 

Plans prescribes interest assumptions 

for valuing and paying certain benefits 

under terminating single-employer 

plans. This final rule amends the benefit 

payments regulation to adopt interest 

assumptions for plans with valuation 

dates in September 2010. Interest 

assumptions are also published on 

PBGC’s Web site (http://www.pbgc.gov). 

DATES: Effective September 1, 2010. 

FOR FURTHER INFORMATION CONTACT: 

Catherine B. Klion, Manager, Regulatory 

and Policy Division, Legislative and 

Regulatory Department, 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 

regulations prescribe actuarial 

assumptions—including interest 

assumptions—for valuing and paying 

plan benefits of terminating singleemployer plans covered by title IV of 

the Employee Retirement Income 

Security Act of 1974. The interest 

assumptions are intended to reflect 

current conditions in the financial and 

annuity markets. 

These interest assumptions are found 

in two PBGC regulations: The regulation 

on Benefits Payable in Terminated 

Single-Employer Plans (29 CFR part 

4022) and the regulation on Allocation 

of Assets in Single-Employer Plans (29 

CFR part 4044). Assumptions under the 

asset allocation regulation are updated 

quarterly; assumptions under the benefit 

payments regulation are updated 

monthly. This final rule updates only 

the assumptions under the benefit 

payments regulation. 

Two sets of interest assumptions are 

prescribed under the benefit payments 

regulation: (1) A set for PBGC to use to 

determine whether a benefit is payable 

as a lump sum and to determine lumpsum amounts to be paid by PBGC (found 

in Appendix B to Part 4022), and (2) a 

set for private-sector pension 

practitioners to refer to if they wish to 

use lump-sum interest rates determined 

using PBGC’s historical methodology 

(found in Appendix C to Part 4022). 

This amendment (1) adds to 

Appendix B to Part 4022 the interest 

assumptions for PBGC to use for its own 

lump-sum payments in plans with 

valuation dates during September 2010, 

and (2) adds to Appendix C to Part 4022 

the interest assumptions for privatesector pension practitioners to refer to if 

they wish to use lump-sum interest rates 

determined using PBGC’s historical 

methodology for valuation dates during 

September 2010. 

The interest assumptions that PBGC 

will use for its own lump-sum payments 

(set forth in Appendix B to Part 4022) 

will be 2.25 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 2010, 

these interest assumptions are 

unchanged. For private-sector 

payments, the interest assumptions (set 

forth in Appendix C to part 4022) will 

be the same as those used by PBGC for 

determining and paying lump sums (set 

forth in Appendix B to Part 4022). 


erowe on DSK5CLS3C1PROD with RULES
49408 Federal Register / Vol. 75, No. 156 / Friday, August 13, 2010 / Rules and Regulations 

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 valuation 

and payment of benefits in plans with 

valuation dates during September 2010, 

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 

203, is added to the table, as set forth 

below: 

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 i1 i2 i3 n1 n2

*******

203 9–1–10 10–1–10 2.25 4.00 4.00 4.00 7 8 

■ 3. In appendix C to Part 4022, Rate Set 

203, is added to the table, as set forth 

below: 

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 i1 i2 i3 n1 n2

*******

203 9–1–10 10–1–10 2.25 4.00 4.00 4.00 7 8 

Issued in Washington, DC, on this 6th day 

of August 2010. 

Vincent K. Snowbarger, 

Deputy Director for Operations, Pension 

Benefit Guaranty Corporation. 

[FR Doc. 2010–20000 Filed 8–12–10; 8:45 am] 

BILLING CODE 7709–01–P 

DEPARTMENT OF HOMELAND 

SECURITY 

Coast Guard 

33 CFR Parts 1, 114, 115, 116, 117, and 

118 

[Docket No. USCG–2010–0351] 

RIN 1625–ZA25 

Navigation and Navigable Waters; 

Technical, Organizational, and 

Conforming Amendments, Bridges 

AGENCY: Coast Guard, DHS. 

ACTION: Final rule. 

SUMMARY: This rule makes nonsubstantive changes throughout our 

regulations. The purpose of this rule is 

to make conforming amendments and 

technical corrections to Coast Guard 

bridge and navigable waters regulations. 

This rule will have no substantive effect 

on the regulated public. 

DATES: This final rule is effective August 

13, 2010. 

ADDRESSES: Comments and material 

received from the public, as well as 

documents mentioned in this preamble 

as being available in the docket, are part 

of docket USCG–2010–0351 and are 

available for inspection or copying at 

the Docket Management Facility (M–30), 

U.S. Department of Transportation, 

West Building Ground Floor, Room 

W12–140, 1200 New Jersey Avenue, SE., 

Washington, DC 20590, between 9 a.m. 

and 5 p.m., Monday through Friday, 

except Federal holidays. You may also 

find this docket on the Internet by going 

to http://www.regulations.gov, inserting 

USCG–2010–0351 in the ‘‘Keyword’’ 

box, and then clicking ‘‘Search.’’ 

FOR FURTHER INFORMATION CONTACT: If 

you have questions on this rule, call or 

e-mail Diane LaCumsky, Coast Guard; 

telephone 202–372–1025, e-mail 

Diane.M.LaCumsky@uscg.mil. If you 

have questions on viewing the docket, 

call Renee V. Wright, Program Manager, 

Docket Operations, telephone 202–366– 

9826. 

SUPPLEMENTARY INFORMATION: 

Regulatory History 

We did not publish a notice of 

proposed rulemaking (NPRM) for this 

rule. Under 5 U.S.C. 553(b)(3)(A), the 

Coast Guard finds this rule is exempt 

from notice and comment rulemaking 

requirements because these changes 

involve rules of agency organization, 

procedure, or practice. In addition, the 

Coast Guard finds notice and comment 


erowe on DSK5CLS3C1PROD with RULES