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[Federal Register Volume 89, Number 246 (Monday, December 23, 2024)]
[Rules and Regulations]
[Pages 104425-104427]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-30459]

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PENSION BENEFIT GUARANTY CORPORATION

29 CFR Part 4044

Allocation of Assets in Single-Employer Plans; Interest 
Assumptions for Valuing 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 Allocation of Assets in Single-Employer 
Plans to prescribe the spreads component of the interest assumption 
under the asset allocation regulation for plans with valuation dates of 
January 31, 2025-April 29, 2025. These interest assumptions are used 
for valuing benefits under terminating single-employer plans and for 
other purposes.

DATES: Effective January 31, 2025.

FOR FURTHER INFORMATION CONTACT: Monica O'Donnell 
([email protected]), Attorney, Office of the General Counsel, 
Pension Benefit Guaranty Corporation, 445 12th Street SW, Washington, 
DC 20024-2101, 202-229-8706. If you are deaf or hard of hearing, or 
have a speech disability, please dial 7-1-1 to access 
telecommunications relay services.

SUPPLEMENTARY INFORMATION: PBGC's regulation on Allocation of Assets in 
Single-Employer Plans (29 CFR part 4044) prescribes actuarial 
assumptions--including an interest assumption--for valuing benefits 
under terminating single-employer plans covered by title IV of the 
Employee etirement Income Security Act of 1974 (ERISA). The interest 
assumption is also posted on PBGC's website (www.pbgc.gov).
    PBGC uses the interest assumption in Sec.  4044.54 to determine the 
present value of annuities in an involuntary or distress termination of 
a single-employer plan under the asset allocation regulation. The 
assumptions in part 4044 of PBGC's regulations are also used in other 
situations where it is appropriate for liabilities to align with 
private sector group annuity prices. For example, PBGC's regulations on 
Notice, Collection, and Redetermination of Withdrawal Liability (29 CFR 
part 4219) and Duties of Plan Sponsor Following Mass Withdrawal (29 CFR 
part 4281) provide that these assumptions are used to value liabilities 
for purposes of determining withdrawn employers' reallocation liability 
in the event of a mass withdrawal from a multiemployer plan. 
Multiemployer plans that receive special financial assistance under the 
regulation on Special Financial Assistance by PBGC (29 CFR part 4262) 
must, as a condition of receiving special financial assistance, use the 
interest assumption to determine withdrawal liability for a prescribed 
period. Additionally, plan sponsors are required to use some, or all of 
these assumptions for specified purposes (e.g., reporting benefit 
liabilities in filings required under PBGC's regulation on Annual 
Financial and Actuarial Information Reporting (29 CFR part 4010) or 
determining certain amounts to transfer to PBGC's Missing Participants 
Program on behalf of a missing participant of a terminating defined 
benefit plan under PBGC's regulation on Missing Participants (29 CFR 
part 4050)) and may use them for other purposes (e.g., to ensure that 
plan spinoffs comply with section 414(l) of the Internal Revenue Code 
(the Code)).
    On June 6, 2024, PBGC issued a final rule at 89 FR 48291 that 
changes the structure of the interest assumption for valuation dates on 
or after July 31, 2024, from the select and ultimate approach to a 
yield curve approach. As described in the June 6 final rule, this 
``4044 yield curve,'' is based on a blend of two publicly available 
bond yield curves that is adjusted to the extent necessary so that the 
resulting liabilities align with group annuity prices. The adjustments 
are referred to as ``spreads.'' PBGC determines and publishes spreads 
quarterly based on survey data on pricing of private-sector group 
annuities. As noted in the preamble to the June 6 rule, PBGC will post 
the 4044 yield curve on its website at www.pbgc.gov each month shortly 
after its underlying data become available. In addition, practitioners 
are able to determine the 4044 yield curve as of the end of any month 
using the publicly available bond yield curves and the spreads 
specified in the regulation.
    This rule amends the regulation to specify the spreads used to 
determine the 4044 yield curve as of the last days of January, 
February, and March of 2025, (i.e., the ``first quarter 2025 
spreads'').

Need for Immediate Guidance

    PBGC has determined that notice of, and public comment on, this 
rule are impracticable, unnecessary, and contrary to the public 
interest. PBGC routinely updates the spreads component of the interest 
assumption in the asset allocation regulation so that the 4044 yield 
curve may be determined as soon as the underlying bond yield curves 
become available. These amendments are merely technical; they ensure 
that use of PBGC's interest assumption continues to yield liabilities 
in line with group annuity prices. Accordingly, PBGC finds that the 
public interest is best served by issuing this rule expeditiously, 
without an opportunity for notice and comment, and 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 4044

    Employee benefit plans, Pension insurance, Pensions.

    In consideration of the foregoing, 29 CFR part 4044 is amended as 
follows:

PART 4044--ALLOCATION OF ASSETS IN SINGLE-EMPLOYER PLANS

0
1. The authority citation for part 4044 continues to read as follows:

    Authority: 29 U.S.C. 1301(a), 1302(b)(3), 1341, 1344, 1362.

0
2. In Sec.  4044.54, revise table 1 to paragraph (e) to read as 
follows:

Sec.  4044.54  Interest assumptions.

* * * * *
    (e) * * *

[[Page 104426]]

                                        Table 1 to Paragraph (e)--Spreads
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                                                           Third quarter      Fourth quarter     First quarter
                     Maturity point                         2024 spreads       2024 spreads       2025 spreads
                                                             (percent)          (percent)          (percent)
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0.5....................................................               0.38               0.33               0.36
1.0....................................................               0.38               0.33               0.36
1.5....................................................               0.37               0.33               0.36
2.0....................................................               0.37               0.33               0.36
2.5....................................................               0.37               0.33               0.36
3.0....................................................               0.37               0.33               0.36
3.5....................................................               0.37               0.33               0.36
4.0....................................................               0.37               0.33               0.36
4.5....................................................               0.37               0.33               0.36
5.0....................................................               0.37               0.33               0.36
5.5....................................................               0.37               0.32               0.35
6.0....................................................               0.37               0.32               0.35
6.5....................................................               0.37               0.32               0.35
7.0....................................................               0.37               0.32               0.35
7.5....................................................               0.37               0.32               0.35
8.0....................................................               0.37               0.32               0.35
8.5....................................................               0.37               0.32               0.34
9.0....................................................               0.37               0.32               0.34
9.5....................................................               0.36               0.32               0.34
10.0...................................................               0.36               0.32               0.34
10.5...................................................               0.36               0.32               0.33
11.0...................................................               0.36               0.32               0.33
11.5...................................................               0.36               0.32               0.33
12.0...................................................               0.36               0.32               0.33
12.5...................................................               0.36               0.32               0.32
13.0...................................................               0.36               0.32               0.32
13.5...................................................               0.35               0.31               0.32
14.0...................................................               0.35               0.31               0.32
14.5...................................................               0.35               0.31               0.31
15.0...................................................               0.35               0.31               0.31
15.5...................................................               0.35               0.31               0.30
16.0...................................................               0.35               0.31               0.30
16.5...................................................               0.34               0.31               0.30
17.0...................................................               0.34               0.31               0.30
17.5...................................................               0.34               0.31               0.29
18.0...................................................               0.34               0.31               0.29
18.5...................................................               0.34               0.31               0.29
19.0...................................................               0.34               0.31               0.29
19.5...................................................               0.34               0.30               0.28
20.0...................................................               0.34               0.30               0.28
20.5...................................................               0.33               0.30               0.28
21.0...................................................               0.33               0.30               0.28
21.5...................................................               0.33               0.30               0.27
22.0...................................................               0.33               0.30               0.27
22.5...................................................               0.33               0.30               0.27
23.0...................................................               0.33               0.30               0.27
23.5...................................................               0.33               0.30               0.26
24.0...................................................               0.33               0.30               0.26
24.5...................................................               0.33               0.30               0.26
25.0...................................................               0.33               0.30               0.26
25.5...................................................               0.33               0.30               0.26
26.0...................................................               0.33               0.30               0.26
26.5...................................................               0.32               0.30               0.26
27.0...................................................               0.32               0.30               0.26
27.5...................................................               0.32               0.30               0.25
28.0...................................................               0.32               0.30               0.25
28.5...................................................               0.32               0.30               0.25
29.0...................................................               0.32               0.30               0.25
29.5...................................................               0.32               0.30               0.25
30.0...................................................               0.32               0.30               0.25
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[[Page 104427]]

    Issued in Washington, DC.
Hilary Duke,
Assistant General Counsel for Regulatory Affairs, Pension Benefit 
Guaranty Corporation.
[FR Doc. 2024-30459 Filed 12-20-24; 8:45 am]
BILLING CODE 7709-02-P
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