Source: https://www.federalregister.gov/documents/2006/03/15/06-2458/benefits-payable-in-terminated-single-employer-plans-allocation-of-assets-in-single-employer-plans
Timestamp: 2017-08-19 11:48:23
Document Index: 83039529

Matched Legal Cases: ['art 4044', 'art 4022', 'art 4022', 'art 4044', 'art 4022', 'art 4022', 'art 4044', 'art 4022', 'art 4022', 'art 4022', 'art 4044']

A Rule by the Pension Benefit Guaranty Corporation on 03/15/2006
Effective April 1, 2006.
71 FR 13258
13258-13260 (3 pages)
https://www.federalregister.gov/d/06-2458 https://www.federalregister.gov/d/06-2458
The Pension Benefit Guaranty Corporation's regulations on Benefits Payable in Terminated Single-Employer Plans and Allocation of Assets in Single-Employer Plans prescribe interest assumptions for valuing and paying benefits under terminating single-employer plans. This final rule amends the regulations to adopt interest assumptions for plans with valuation dates in April 2006. Interest assumptions are also published on the PBGC's Web site (http://www.pbgc.gov).
Three sets of interest assumptions are prescribed: (1) A set for the valuation of benefits for allocation purposes under section 4044 (found in Appendix B to Part 4044), (2) a set for the PBGC to use Start Printed Page 13259to determine whether a benefit is payable as a lump sum and to determine lump-sum amounts to be paid by the PBGC (found in Appendix B to Part 4022), and (3) a set for private-sector pension practitioners to refer to if they wish to use lump-sum interest rates determined using the PBGC's historical methodology (found in Appendix C to Part 4022).
This amendment (1) adds to Appendix B to Part 4044 the interest assumptions for valuing benefits for allocation purposes in plans with valuation dates during April 2006, (2) adds to Appendix B to Part 4022 the interest assumptions for the PBGC to use for its own lump-sum payments in plans with valuation dates during April 2006, and (3) adds to Appendix C to Part 4022 the interest assumptions for private-sector pension practitioners to refer to if they wish to use lump-sum interest rates determined using the PBGC's historical methodology for valuation dates during April 2006.
For valuation of benefits for allocation purposes, the interest assumptions that the PBGC will use (set forth in Appendix B to part 4044) will be 5.60 percent for the first 20 years following the valuation date and 4.75 percent thereafter. These interest assumptions represent a decrease (from those in effect for March 2006) of 0.10 percent for the first 20 years following the valuation date and are otherwise unchanged. These interest assumptions reflect the PBGC's recently updated mortality assumptions, which are effective for terminations on or after January 1, 2006. See the PBGC's final rule published December 2, 2005 (70 FR 72205), which is available at http://www.pbgc.gov/​docs/​05-23554.pdf. Because the updated mortality assumptions reflect improvements in mortality, these interest assumptions are higher than they would have been using the old mortality assumptions.
The interest assumptions that the PBGC will use for its own lump-sum payments (set forth in Appendix B to part 4022) will be 2.75 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. These interest assumptions represent no change from those in effect for March 2006.
Because of the need to provide immediate guidance for the valuation and payment of benefits in plans with valuation dates during April 2006, the PBGC finds that good cause exists for making the assumptions set forth in this amendment effective less than 30 days after publication.
2. In appendix B to part 4022, Rate Set 150, as set forth below, is added to the table.
150 4-1-06 5-1-06 2.75 4.00 4.00 4.00 7 8
3. In appendix C to part 4022, Rate Set 150, as set forth below, is added to the table.
Immediate annuitys rate (percent)
Start Part Start Printed Page 13260
5. In appendix B to part 4044, a new entry for April 2006, as set forth below, is added to the table.
For valuation occurring in the month—
April 2006 .0560 1-20 .0475 >20 N/A N/A
Issued in Washington, DC, on this 8th day of March 2006.
[FR Doc. 06-2458 Filed 3-14-06; 8:45 am]