36970 Federal Register / Vol. 61, No. 156 / Monday, July 15, 1996 / Notices

PENSION BENEFIT GUARANTY

CORPORATION

Interest Assumption for Determining

Variable-Rate Premium; Interest on

Late Premium Payments; Interest on

Underpayments and Overpayments of

Single-Employer Plan Termination

Liability and Multiemployer Withdrawal

Liability; Interest Assumptions for

Multiemployer Plan Valuations

Following Mass Withdrawal

AGENCY: Pension Benefit Guaranty

Corporation.

ACTION: Notice of interest rates and

assumptions.

SUMMARY: This notice informs the public

of the interest rates and assumptions to

be used under certain Pension Benefit

Guaranty Corporation regulations. These

rates and assumptions are published

elsewhere (or are derivable from rates

published elsewhere), but are collected

and published in this notice for the

convenience of the public. Interest rates

are also published on the PBGC’s home

page (http://www.pbgc.gov).

DATES: The interest assumptions for

determining the variable-rate premium

under part 4006 apply to premium

payment years beginning in May, June,

and July 1996. The interest assumptions

for performing multiemployer plan

valuations following mass withdrawal

under part 4281 apply to valuation dates

occurring in August 1996. The interest

rates for late premium payments under

part 4007 and for underpayments and

overpayments of single-employer plan

termination liability under part 4062

and multiemployer withdrawal liability

under part 4219 apply to interest

accruing during the third quarter (July

through September) of 1996.

FOR FURTHER INFORMATION CONTACT:

Harold J. Ashner, Assistant General

Counsel, Office of the General Counsel,

Pension Benefit Guaranty Corporation,

1200 K Street, NW., Washington, DC

20005, 202–326–4024 (202–326–4179

for TTY and TDD).

SUPPLEMENTARY INFORMATION: Before

July 1996, the rates and assumptions to

be used under the PBGC regulations

discussed below were set forth in tables

in the regulations, even though the

tabulated rates were merely copied from

(or based on) rates published by other

agencies, or were identical to rates in

other PBGC regulations. In a final rule

effective July 1, 1996 (61 FR 34001), the

PBGC reorganized, renumbered, and

significantly shortened its regulations.

Tables that simply set forth information

available elsewhere were among the

unnecessary items that were removed.

The PBGC will now publish the new

rates and assumptions in Federal

Register notices on or about the 15th of

each month, with tables of the rates for

recent periods. The rates will be

published monthly or quarterly, as

appropriate, regardless of whether they

have changed.

Variable-Rate Premiums

Section 4006(a)(3)(E)(iii)(II) of the

Employee Retirement Income Security

Act of 1974 and § 4006.4(b)(1) of the

PBGC’s regulation on Premium Rates

(29 CFR part 4006) prescribe methods

for determining a single-employer plan’s

unfunded vested benefits for premium

computation purposes. These methods

(previously codified at 29 CFR part

2610) involve use of an assumed interest

rate equal to a specified percentage

(currently 80 percent) of the annual

yield on 30-year Treasury securities for

the month preceding the beginning of

the plan year for which premiums are

being paid. The yield figure is reported

in Federal Reserve Statistical Releases

G.13 and H.15. The assumed interest

rates to be used for computing

premiums for plan years beginning in

May, June, and July 1996 (i.e., 80

percent of the yield figures for April,

May, and June 1996) are 5.43 percent,

5.54 percent, and 5.65 percent

respectively.

The following table lists the interest

rates required under 29 CFR

4006.4(b)(1) to be used in valuing vested

benefits for purposes of determining

variable-rate premiums for plans with

premium payment years beginning

within the specified months:

For premium payment years beginning in

The required

interest

rate is

August 1995 ...................................... 5.38

September 1995 ............................... 5.49

October 1995 .................................... 5.24

November 1995 ................................ 5.10

December 1995 ................................ 5.01

January 1996 .................................... 4.85

February 1996 .................................. 4.84

March 1996 ....................................... 4.99

April 1996 .......................................... 5.28

May 1996 .......................................... 5.43

June 1996 ......................................... 5.54

July 1996 .......................................... 5.65

Late Premium Payments;

Underpayments and Overpayments of

Single-employer Plan Termination

Liability

Section 4007(b) of ERISA and

§ 4007.7(a) of the PBGC’s regulation on

Payment of Premiums (29 CFR part

4007) require the payment of interest on

late premium payments at the rate

established under section 6601 of the

Internal Revenue Code. Similarly,

§ 4062.7 of the PBGC’s regulation on

Liability for Termination of Singleemployer Plans (29 CFR part 4062)

requires that interest be charged or

credited at the section 6601 rate on

underpayments and overpayments of

employer liability under section 4062 of

ERISA. (These provisions were

previously codified at 29 CFR parts

2610 and 2622.) The section 6601 rate

is established periodically (currently

quarterly) by the Internal Revenue

Service. The rate applicable to the third

quarter (July through September) of

1996, as announced by the IRS, is 9

percent.

The following table lists the late

payment interest rates under 29 CFR

§§ 4007.7(a) and 4062.7 for the specified

time periods:

From Through

Interest

rate (percent)

10/1/89 3/31/91 11

4/1/91 12/31/91 10

1/1/92 3/31/92 9

4/1/92 9/30/92 8

10/1/92 6/30/94 7

7/1/94 9/30/94 8

10/1/94 3/31/95 9

4/1/95 6/30/95 10

7/1/95 3/31/96 9

4/1/96 6/30/96 8

7/1/96 9/30/96 9

Underpayments and Overpayments of

Multiemployer Withdrawal Liability

Section 4219.32(b) of the PBGC’s

regulation on Notice, Collection, and

Redetermination of Withdrawal

Liability (29 CFR part 4219) specifies

the rate at which a multiemployer plan

is to charge or credit interest on

underpayments and overpayments of

withdrawal liability under section 4219

of ERISA unless an applicable plan

provision provides otherwise. (These

provisions were previously codified at

29 CFR part 2644.) For interest accruing

during any calendar quarter, the

specified rate is the average quoted

prime rate on short-term commercial

loans for the fifteenth day (or the next

business day if the fifteenth day is not

a business day) of the month preceding

the beginning of the quarter, as reported

by the Board of Governors of the Federal

Reserve System in Statistical Release

H.15 (‘‘Selected Interest Rates’’). The

rate for the third quarter (July through

September) of 1996 (i.e., the rate

reported for June 17, 1996) is 8.25

percent.

The following table lists the

withdrawal liability underpayment and

overpayment interest rates under 29
Federal Register / Vol. 61, No. 156 / Monday, July 15, 1996 / Notices 36971

CFR § 4219.32(b) for the specified time

periods:

From Through Rate (percent)

4/1/90 3/31/91 10.00

4/1/91 6/30/91 9.00

7/1/91 9/30/91 8.50

10/1/91 12/31/91 8.00

1/1/92 3/31/92 7.50

4/1/92 9/30/92 6.50

10/1/92 6/30/94 6.00

7/1/94 9/30/94 7.25

10/1/94 12/31/94 7.75

1/1/95 3/31/95 8.50

4/1/95 9/30/95 9.00

10/1/95 3/31/96 8.75

4/1/96 9/30/96 8.25

Multiemployer Plan Valuations

Following Mass Withdrawal

Section 4281.13 of the PBGC’s

regulation on Duties of Plan Sponsor

Following Mass Withdrawal (29 CFR

part 4281) prescribes methods for

valuing benefits and certain assets of

multiemployer plans following mass

withdrawal under sections 4219(c)(1)(D)

and 4281(b) of ERISA. These methods

(previously codified at 29 CFR part

2676) involve use of the same interest

assumptions used and prescribed under

the PBGC’s regulation on Allocation of

Assets in Single-employer Plans (29

CFR part 4044). However, only part

4044 actually sets forth the prescribed

interest assumptions; part 4281 simply

refers to the assumptions in part 4044.

The interest assumptions applicable to

valuation dates in August 1996 under

part 4044 are contained in an

amendment to part 4044 published

elsewhere in today’s Federal Register.

Tables showing the assumptions

applicable to prior periods are codified

in appendix B to 29 CFR part 4044.

Issued in Washington, DC, on this 5th day

of July 1996.

Martin Slate,

Executive Director, Pension Benefit Guaranty

Corporation.

[FR Doc. 96–17793 Filed 7–12–96; 8:45 am]

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