13904 Federal Register / Vol. 60, No. 50 / Wednesday, March 15, 1995 / Rules and Regulations

9. Section 40.22 is revised to read as

follows:

§ 40.22 Significance of certification.

Certification of a grievance procedure

by the Attorney General shall signify

only that on the basis of the information

submitted, the Attorney General

believes the grievance procedure is in

substantial compliance with the

minimum standards or is otherwise fair

and effective. Certification shall not

indicate approval of the use or

application of the grievance procedure

in a particular case.

Dated: March 3, 1995.

Janet Reno,

Attorney General.

[FR Doc. 95–6287 Filed 3–14–95; 8:45 am]

BILLING CODE 4410–01–M

PENSION BENEFIT GUARANTY

CORPORATION

29 CFR Parts 2619 and 2676

Valuation of Plan Benefits in SingleEmployer Plans; Valuation of Plan

Benefits and Plan Assets Following

Mass Withdrawal; Amendments

Adopting Additional PBGC Rates

AGENCY: Pension Benefit Guaranty

Corporation.

ACTION: Final rule.

SUMMARY: This final rule amends the

Pension Benefit Guaranty Corporation’s

regulations on Valuation of Plan

Benefits in Single-Employer Plans and

Valuation of Plan Benefits and Plan

Assets Following Mass Withdrawal. The

former regulation contains the interest

assumptions that the PBGC uses to

value benefits under terminating singleemployer plans. The latter regulation

contains the interest assumptions for

valuations of multiemployer plans that

have undergone mass withdrawal. The

amendments set out in this final rule

adopt the interest assumptions

applicable to single-employer plans

with termination dates in April 1995,

and to multiemployer plans with

valuation dates in April 1995. The effect

of these amendments is to advise the

public of the adoption of these

assumptions.

EFFECTIVE DATE: April 1, 1995.

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: This rule

adopts the April 1995 interest

assumptions to be used under the

Pension Benefit Guaranty Corporation’s

regulations on Valuation of Plan

Benefits in Single-Employer Plans (29

CFR part 2619, the ‘‘single-employer

regulation’’) and Valuation of Plan

Benefits and Plan Assets Following

Mass Withdrawal (29 CFR part 2676, the

‘‘multiemployer regulation’’).

Part 2619 sets forth the methods for

valuing plan benefits of terminating

single-employer plans covered under

title IV of the Employee Retirement

Income Security Act of 1974, as

amended. Under ERISA section 4041(c),

all single-employer plans wishing to

terminate in a distress termination must

value guaranteed benefits and ‘‘benefit

liabilities,’’ i.e., all benefits provided

under the plan as of the plan

termination date, using the formulas set

forth in part 2619, subpart C. (Plans

terminating in a standard termination

may, for purposes of the Standard

Termination Notice filed with PBGC,

use these formulas to value benefit

liabilities, although this is not required.)

In addition, when the PBGC terminates

an underfunded plan involuntarily

pursuant to ERISA section 4042(a), it

uses the subpart C formulas to

determine the amount of the plan’s

underfunding. Part 2676 prescribes

rules for valuing benefits and certain

assets of multiemployer plans under

sections 4219(c)(1)(D) and 4281(b) of

ERISA.

Appendix B to part 2619 set forth the

interest rates and actors under the

single-employer regulation. Appendix B

to part 2676 sets forth the interest rates

and factors under the multiemployer

regulation. Because these rates and

factors are intended to reflect current

conditions in the financial and annuity

markets, it is necessary to update the

rates and factors periodically.

The PBGC issues two sets of interest

rates and factors, one set to be used for

the valuation of benefits to be paid as

annuities and one set for the valuation

of benefits to be paid as lump sums. The

same assumptions apply to terminating

single-employer plans and to

multiemployer plans that have

undergone a mass withdrawal. This

amendment adds to appendix B to parts

2619 and 2676 sets of interest rates and

factors for valuing benefits in singleemployer plans that have termination

dates during April 1995 and

multiemployer plans that have

undergone mass withdrawal and have

valuation dates during April 1995.

For annuity benefits, the interests

rates will be 7.10% for the first 20 years

following the valuation date and 5.75%

thereafter. For benefits to be paid as

lump sums, the interest assumptions to

be used by the PBGC will be 5.75% for

the period during which benefits are in

pay status, 5.00% during the seven-year

period directly preceding the benefit’s

placement in pay status, and 4.0%

during any other years preceding the

benefit’s placement in pay status The

above annuity interest assumptions

represent a decrease (from those in

effect for March 1995) of .20 percent for

the first 20 years following the valuation

date are otherwise unchanged. The

lump sum interest assumptions

represent a decrease (from those in

effect for March 1995) of .25 percent for

the period during which benefits are in

pay status and the seven years directly

preceding that period; they are

otherwise unchanged.

Generally, the interest rates and

factors under these regulations are in

effect for at least one month. However,

the PBGC publishes its interest

assumptions each month regardless of

whether they represent a change from

the previous month’s assumptions. The

assumptions normally will be published

in the Federal Register by the 15th of the

preceding month or as close to that date

as circumstances permit.

The PBGC has determined that notice

and public comment on these

amendments are impracticable and

contrary to the public interest. This

finding is based on the need to

determine and issue new interest rates

and factors promptly so that the rates

and factors can reflect, as accurately as

possible, current market conditions.

Because of the need to provide

immediate guidance for the valuation of

benefits in single-employer plans whose

termination dates fall during April 1995,

and in multiemployer plans that have

undergone mass withdrawal and have

valuation dates during April 1995, the

PBGC finds that good cause exists for

making the rates and factors set forth in

this amendment effective less than 30

days after publication.

The PBGC has determined that this

action is not a ‘‘significant regulatory

action’’ under the criteria set forth in

Executive Order 12866, because it will

not have an annual effect on the

economy of $100 million or more or

adversely affect in a material way the

economy, a sector of the economy,

productivity, competition, jobs, the

environment, pubic health or safety, or

State, local, or tribal governments or

communities; create a serious

inconsistency or otherwise interfere

with an action taken or planned by

another agency; materially alter the

budgetary impact of entitlements,

grants, user fees, or loan programs or the

rights and obligations of recipients

thereof; or raise novel legal or policy
Federal Register / Vol. 60, No. 50 / Wednesday, March 15, 1995 / Rules and Regulations 13905

issues arising out of legal mandates, the

President’s priorities, or the principles

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

29 CFR Part 2619

Employee benefit plans, Pension

insurance, and Pensions.

29 CFR Part 2676

Employee benefit plans, Pensions.

In consideration of the foregoing,

parts 2619 and 2676 of chapter XXVI,

title 29, Code of Federal Regulations, are

hereby amended as follows:

PART 2619—[AMENDED]

1. The authority citation for part 2619

continues to read as follows:

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

1341, 1344, 1362.

2. In appendix B, Rate Set 18 is added

to Table I, and a new entry is added to

Table II, as set forth below. The

introductory text of both tables is

republished for the convenience of the

reader and remains unchanged.

Appendix B to Part 2619—Interest

Rates Used to Value Lump Sums and

Annuities

Lump Sum Valuations

In determining the value of interest factors

of the form v0 : n (as defined in

§ 2619.49(b)(1)) for purposes of applying the

formulas set forth in § 2619.49 (b) through (i)

and in determining the value of any interest

factor used in valuing benefits under this

subpart to be paid as lump sums (including

the return of accumulated employee

contributions upon death), the PBGC shall

employ the values of it set out in Table I

hereof as follows:

(1) For benefits for which the participant

or beneficiary is entitled to be in pay status

on the valuation date, the immediate annuity

rate shall apply.

(2) For benefits for which the deferral

period is y years (y is an integer and 0<y ≤n1),

interest rate i1 shall apply from the valuation

date for a period of y years; thereafter the

immediate annuity rate shall apply.

(3) For benefits for which the deferral

period is y years (y is an integer and n1<y

≤n1+n2), interest rate i2 shall apply from the

valuation date for a period of y¥n1 years,

interest rate i1 shall apply for the following

n1 years; thereafter the immediate annuity

rate shall apply.

(4) For benefits for which the deferral

period is y years (y is an integer and

y>n1+n2), interest rate i3 shall apply from the

valuation date for a period of y¥n1¥n2

years, interest rate i2 shall apply for the

following n2 years, interest rate i1 shall apply

for the following n1 years; thereafter the

immediate annuity rate shall apply.

TABLE I

[Lump Sum Valuations]

Rate set

For plans with a valuation date Immediate

annuity rate

(percent)

Deferred annuities (percent)

On or after Before i1 i2 i3 n1 n2

* * * * * * *

18 4–1–95 5–1–95 5.75 5.00 4.00 4.00 7 8

Annuity Valuations

In determining the value of interest factors

of the form v0 : n (as defined in

§ 2619.49(b)(1)) for purposes of applying the

formulas set forth in § 2619.49 (b) through (i)

and in determining the value of any interest

factor used in valuing annuity benefits under

this subpart, the plan administrator shall use

the values of it prescribed in Table II hereof.

The following table tabulates, for each

calendar month of valuation ending after the

effective date of this part, the interest rates

(denoted by i1, i2, * * *, and referred to

generally as it) assumed to be in effect

between specified anniversaries of a

valuation date that occurs within that

calendar month; those anniversaries are

specified in the columns adjacent to the

rates. The last listed rate is assumed to be in

effect after the last listed anniversary date.

TABLE II

[Annuity Valuations]

For valuation dates occurring in the month—

The values of it are:

it for t = it for t = it for t =

* * * * * * *

April 1995 ............................................................................................................................ .0710 1–20 .0575 >20 N/A N/A

PART 2676—[AMENDED]

3. The authority citation for part 2676

continues to read as follows:

Authority: 29 U.S.C. 1302(b)(3),

1399(c)(1)(D), 1441(b)(1).

4. In appendix B, Rate Set 18 is added

to Table I, and a new entry is added to

Table II, as set forth below. The

introductory text of both tables is

republished for the convenience of the

reader and remains unchanged.

Appendix B to Part 2676—Interest

Rates Used to Value Lump Sums and

Annuities

Lump Sum Valuations

In determining the value of interest factors

of the form v0 : n (as defined in

§ 2676.13(b)(1)) for purposes of applying the

formulas set forth in § 2676.13 (b) through (i)

and in determining the value of any interest

factor used in valuing benefits under this

subpart to be paid as lump sums, the PBGC

shall use the values of it prescribed in Table

I hereof. The interest rates set forth in Table

I shall be used by the PBGC to calculate

benefits payable as lump sum benefits as

follows:

(1) For benefits for which the participant

or beneficiary is entitled to be in pay status

on the valuation date, the immediate annuity

rate shall apply.

(2) For benefits for which the deferral

period is y years (y is an integer and 0<y≤n1),

interest rate i1 shall apply from the valuation

date for a period of y years; thereafter the

immediate annuity rate shall apply.

(3) For benefits for which the deferral

period is y years (y is an integer and

n1<y≤n1+n2), interest rate i2 shall apply from

the valuation date for a period of y¥n1 years,
13906 Federal Register / Vol. 60, No. 50 / Wednesday, March 15, 1995 / Rules and Regulations

1The guarantee described herein is not intended

to refer to a securities dealer submitting or

forwarding a noncompetitive bid for a customer.

interest rate i1 shall apply for the following

n1 years; thereafter the immediate annuity

rate shall apply.

(4) For benefits for which the deferral

period is y years (y is an integer and

y>n1+n2), interest rate i3 shall apply from the

valuation date for a period of y¥n1¥n2

years, interest rate i2 shall apply for the

following n2 years, interest rate i1 shall apply

for the following n1 years; thereafter the

immediate annuity rate shall apply.

TABLE I

[Lump Sum Valuations]

Rate set

For plans with a valuation date Immediate

annuity rate

(percent)

Deferred annuities (percent)

On or after Before i i 2 i 3 n 1 n 2

* * * * * * *

18 4–1–95 5–1–95 5.75 5.00 4.00 4.00 7 8

Annuity Valuations

In determining the value of interest factors

of the form v0:n (as defined in § 2676.13(b)(1))

for purposes of applying the formulas set

forth in § 2676.13 (b) through (i) and in

determining the value of any interest factor

used in valuing annuity benefits under this

subpart, the plan administrator shall use the

values of it prescribed in the table below.

The following table tabulates, for each

calendar month of valuation ending after the

effective date of this part, the interest rates

(denoted by i 1, i 2, * * *, and referred to

generally as it) assumed to be in effect

between specified anniversaries of a

valuation date that occurs within that

calendar month; those anniversaries are

specified in the columns adjacent to the

rates. The last listed rate is assumed to be in

effect after the last listed anniversary date.

TABLE II

[Annuity Valuations]

For valuation dates occurring in the month—

The values of i t are:

i for t = i t for t = i t for t =

* * * * * * *

April 1995 ............................................................................................................................ .0710 1–20 .0575 >20 N/A N/A

Issued in Washington, DC, on this 8th day

of March 1995.

Martin Slate,

Executive Director, Pension Benefit Guaranty

Corporation.

[FR Doc. 95–6359 Filed 3–14–95; 8:45 am]

BILLING CODE 7708–01–M

DEPARTMENT OF THE TREASURY

Fiscal Service

31 CFR Part 356

Sale and Issue of Marketable BookEntry Treasury Bills, Notes, and Bonds

(Department of the Treasury Circular,

Public Debt Series No. 1–93)

AGENCY: Bureau of the Public Debt,

Fiscal Service, Department of the

Treasury.

ACTION: Final rule.

SUMMARY: The Department of the

Treasury (‘‘Department’’) is issuing in

final form an amendment to 31 CFR Part

356, published as a final rule on January

5, 1993 (58 FR 412). This amendment

clarifies the definition of the term ‘‘bid’’

and changes the required format for

competitive bids for Treasury notes and

bonds from two decimals to three

decimals.

EFFECTIVE DATE: February 22, 1995.

FOR FURTHER INFORMATION CONTACT:

Michael W. Sunner, Deputy Assistant

Commissioner, Office of Financing,

Bureau of the Public Debt (202) 219–

3350, or Margaret Marquette, AttorneyAdviser, Office of the Chief Counsel,

Bureau of the Public Debt (202) 219–

3320.

SUPPLEMENTARY INFORMATION: 31 CFR

Part 356, also referred to as the uniform

offering circular, sets out the terms and

conditions for the sale and issuance by

the Department of the Treasury to the

public of marketable Treasury bills,

notes, and bonds. The final rule

contained herein amends §§ 356.2 and

356.12 of the uniform offering circular.

In § 356.2, the definition of the term

‘‘bid’’ has been modified. The

Department has become aware that

securities dealers may enter into

transactions whereby they effectively

‘‘guarantee’’ the amount and price of

securities their customers will receive

following a Treasury auction.1 The price

guaranteed may be simply an agreedupon price, or it may be a price fixed

in terms of an agreed-upon standard,

e.g., the weighted average auction price.

The dealer may obtain securities to

fulfill such a guarantee either through

an auction bid or through the whenissued market, or both.

The Department views the guarantee

described above to be the equivalent of

a when-issued trade between the dealer

and its customer. Therefore, the

Department has determined that, for

purposes of Treasury’s auction rules,

any bid of the dealer to obtain securities

to fulfill such a guarantee is a bid for the

dealer’s own account and not a bid for

a customer, as the term customer is

defined in the offering circular. This

means that the recipient of the

guarantee may not be listed as a

customer in connection with any bid to

fulfill the guarantee. Rather, the

depository institution or dealer that has

made the guarantee is considered the

bidder and must include such amount

as part of its own bid. The guaranteeing

entity may reflect the guaranteed

amount being included in its bid as a

short position in calculating its net long

position. If the recipient of the

guarantee for a specific security also

bids for that same security in its own

name either directly or through a

submitter, it must treat the amount of

any guarantee as a long position in

calculating its net long position.