Source: https://www.federalregister.gov/documents/2013/12/13/2013-29755/allocation-of-assets-in-single-employer-plans-benefits-payable-in-terminated-single-employer-plans
Timestamp: 2018-03-19 17:05:18
Document Index: 792086653

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

Federal Register :: Allocation of Assets in Single-Employer Plans; Benefits Payable in Terminated Single-Employer Plans; Interest Assumptions for Valuing and Paying Benefits
Allocation of Assets in Single-Employer Plans; Benefits Payable in Terminated Single-Employer Plans; Interest Assumptions for Valuing and Paying Benefits
A Rule by the Pension Benefit Guaranty Corporation on 12/13/2013
Effective January 1, 2014.
78 FR 75897
75897-75898 (2 pages)
2013-29755
https://www.federalregister.gov/d/2013-29755 https://www.federalregister.gov/d/2013-29755
This PDF is the current document as it appeared on Public Inspection on 12/12/2013 at 08:45 am.
Start Preamble Start Printed Page 75897
This final rule amends the Pension Benefit Guaranty Corporation's regulations on Benefits Payable in Terminated Single-Employer Plans and Allocation of Assets in Single-Employer Plans to prescribe interest assumptions under the benefit payments regulation for valuation dates in January 2014 and interest assumptions under the asset allocation regulation for valuation dates in the first quarter of 2014. The interest assumptions are used for valuing and paying benefits under terminating single-employer plans covered by the pension insurance system administered by PBGC.
Catherine B. Klion (Klion.Catherine@PBGC.gov), Assistant General Counsel for Regulatory Affairs, 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.)
PBGC's regulations on Allocation of Assets in Single-Employer Plans (29 CFR Part 4044) and Benefits Payable in Terminated Single-Employer Plans (29 CFR Part 4022) prescribe actuarial assumptions—including interest assumptions—for valuing and paying plan benefits under terminating single-employer plans covered by title IV of the Employee Retirement Income Security Act of 1974. The interest assumptions in the regulations are also published on PBGC's Web site (http://www.pbgc.gov).
The interest assumptions in Appendix B to Part 4044 are used to value benefits for allocation purposes under ERISA section 4044. PBGC uses the interest assumptions in Appendix B to Part 4022 to determine whether a benefit is payable as a lump sum and to determine the amount to pay. Appendix C to Part 4022 contains interest assumptions for private-sector pension practitioners to refer to if they wish to use lump-sum interest rates determined using PBGC's historical methodology. Currently, the rates in Appendices B and C of the benefit payment regulation are the same.
The interest assumptions are intended to reflect current conditions in the financial and annuity markets. Assumptions under the asset allocation regulation are updated quarterly; assumptions under the benefit payments regulation are updated monthly. This final rule updates the benefit payments interest assumptions for January 2014 and updates the asset allocation interest assumptions for the first quarter (January through March) of 2014.
The first quarter 2014 interest assumptions under the allocation regulation will be 3.35 percent for the first 20 years following the valuation date and 3.50 percent thereafter. In comparison with the interest assumptions in effect for the fourth quarter of 2013, these interest assumptions represent no change in the select period (the period during which the select rate (the initial rate) applies), an increase of 0.35 percent in the select rate, and an increase of 0.19 percent in the ultimate rate (the final rate).
The January 2014 interest assumptions under the benefit payments regulation will be 1.75 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. In comparison with the interest assumptions in effect for December 2013, these interest assumptions are unchanged.
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 under plans with valuation dates during January 2014, 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.
In consideration of the foregoing, 29 CFR parts 4022 and 4044 are amended as follows:
2. In appendix B to part 4022, Rate Set 243, as set forth below, is added to the table.
Start Printed Page 75898
i 1
i 2
i 3
n 1
n 2
243 1-1-14 2-1-14 1.75 4.00 4.00 4.00 7 8
3. In appendix C to part 4022, Rate Set 243, as set forth below, is added to the table.
5. In appendix B to part 4044, a new entry for January-March 2014, as set forth below, is added to the table.
The values of i t are:
i t
January-March 2014 0.0335 1-20 0.0350 >20 N/A N/A
Issued in Washington, DC, on this 9th day of December 2013.
Judith Starr,
General Counsel, Pension Benefit Guaranty Corporation.
[FR Doc. 2013-29755 Filed 12-12-13; 8:45 am]
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