Source: https://www.federalregister.gov/documents/2004/02/13/04-3245/required-interest-rate-assumption-for-determining-variable-rate-premium-interest-assumptions-for
Timestamp: 2018-12-16 10:59:15
Document Index: 500112812

Matched Legal Cases: ['art 4006', 'art 4281', '§\u20094006', 'art 4006', 'art 4281', 'art 4044', 'art 4044', 'art 4044', 'art 4044']

A Notice by the Pension Benefit Guaranty Corporation on 02/13/2004
The required interest rate for determining the variable-rate premium under part 4006 applies to premium payment years beginning in February 2004. The interest assumptions for performing multiemployer plan valuations following mass withdrawal under part 4281 apply to valuation dates occurring in March 2004.
69 FR 7265
04-3245
https://www.federalregister.gov/d/04-3245 https://www.federalregister.gov/d/04-3245
The PBGC notes that the provisions of the Job Creation and Worker Assistance Act of 2002 that temporarily increased the required interest rate to be used to determine the PBGC's variable-rate premium to 100% (from 85%) of the annual yield on 30-year Treasury securities expired at the end of 2003. Thus, the required interest rate announced in this notice for plan years beginning in February 2004 has been determined under prior law. Legislation has been proposed that would further change the rules for determining the required interest rate. If such legislation is adopted, and the change affects the required interest rate for plan years beginning in February 2004, the PBGC will promptly publish a Federal Register notice with the new required interest rate and post the change on the PBGC's Web site.
Section 4006(a)(3)(E)(iii)(II) of the Employee Retirement Income Security Act of 1974 (ERISA) and § 4006.4(b)(1) of the PBGC's regulation on Premium Rates (29 CFR part 4006) prescribe use of an assumed interest rate (the “required interest rate”) in determining a single-employer plan's variable-rate premium. The required interest rate is the “applicable percentage” (currently 85 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 “premium payment year”). (Although the Treasury Department has ceased issuing 30-year securities, the Internal Revenue Service announces a surrogate yield figure each month—based on the 30-year Treasury bond maturing in February 2031—which the PBGC uses to determine the required interest rate.) The required interest rate to be used in determining variable-rate premiums for premium payment years beginning in February 2004 is 4.23 percent (i.e., 85 percent of the 4.98 percent yield figure for January 2004).
The following table lists the required interest rates to be used in determining variable-rate premiums for premium Start Printed Page 7266payment years beginning between March 2003 and February 2004.
The PBGC's regulation on Duties of Plan Sponsor Following Mass Withdrawal (29 CFR part 4281) prescribes the use of interest assumptions under the PBGC's regulation on Allocation of Assets in Single-Employer Plans (29 CFR part 4044). The interest assumptions applicable to valuation dates in March 2004 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.
[FR Doc. 04-3245 Filed 2-12-04; 8:45 am]