[Federal Register Volume 63, Number 49 (Friday, March 13, 1998)]
[Notices]
[Page 12519]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-6506]
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PENSION BENEFIT GUARANTY CORPORATION
Interest Assumption for Determining Variable-Rate Premium;
Interest Assumptions for Multiemployer Plan Valuations Following Mass
Withdrawal
AGENCY: Pension Benefit Guaranty Corporation.
ACTION: Notice of interest rates and assumptions.
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SUMMARY: This notice informs the public of the interest rates and
assumptions to be used under certain Pension Benefit Guaranty
Corporation regulations. These rates and assumptions are published
elsewhere (or are derivable from rates published elsewhere), but are
collected and published in this notice for the convenience of the
public. Interest rates are also published on the PBGC's home page
(http://www.pbgc.gov).
DATES: The interest rate for determining the variable-rate premium
under part 4006 applies to premium payment years beginning in March
1998. The interest assumptions for performing multiemployer plan
valuations following mass withdrawal under part 4281 apply to valuation
dates occurring in April 1998.
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.
(For TTY/TDD users, call the Federal relay service toll-free at 1-800-
877-8339 and ask to be connected to 202-326-4024.)
SUPPLEMENTARY INFORMATION:
Variable-Rate Premiums
Section 4006(a)(3)(E)(iii)(II) of the Employee Retirement Income
Security Act of 1974 (ERISA) and Sec. 4006.4(b)(1) of the PBGC's
regulation on Premium Rates (29 CFR part 4006) prescribe use of an
assumed interest rate in determining a single-employer plan's variable-
rate premium. The rate is the ``applicable percentage'' (described in
the statute and the regulation) 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''). The yield
figure is reported in Federal Reserve Statistical Releases G.13 and
H.15.
For plan years beginning before July 1, 1997, the applicable
percentage of the 30-year Treasury yield was 80 percent. The Retirement
Protection Act of 1994 (RPA) amended ERISA section
4006(a)(3)(E)(iii)(II) to change the applicable percentage to 85
percent, effective for plan years beginning on or after July 1, 1997.
(The amendment also provides for a further increase in the applicable
percentage--to 100 percent--when the Internal Revenue Service adopts
new mortality tables for determining current liability.)
The assumed interest rate to be used in determining variable-rate
premiums for premium payment years beginning in March 1998 is 5.01
percent (i.e., 85 percent of the 5.89 percent yield figure for February
1998).
(Under section 774(c) of the RPA, the amendment to the applicable
percentage was deferred for certain regulated public utility (RPU)
plans for as long as six months. The applicable percentage for RPU
plans has therefore remained 80 percent for plan years beginning before
January 1, 1998. For ``partial'' RPU plans, the assumed interest rates
to be used in determining variable-rate premiums can be computed by
applying the rules in Sec. 4006.5(g) of the premium rates regulation.
The PBGC's 1997 premium payment instruction booklet also describes
these rules and provides a worksheet for computing the assumed rate.)
The following table lists the assumed interest rates to be used in
determining variable-rate premiums for premium payment years beginning
between April 1997 and March 1998. The rates for July through December
1997 in the table (which reflect an applicable percentage of 85
percent) apply only to non-RPU plans. However, the rates for months
before July 1997 and after December 1997 apply to RPU (and ``partial''
RPU) plans as well as to non-RPU plans.
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The assumed
For premium payment years beginning in: interest rate
is:
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April 1997.............................................. 5.54
May 1997................................................ 5.67
June 1997............................................... 5.55
July 1997............................................... 5.75
August 1997............................................. 5.53
September 1997.......................................... 5.59
October 1997............................................ 5.53
November 1997........................................... 5.38
December 1997........................................... 5.19
January 1998............................................ 5.09
February 1998........................................... 4.94
March 1998.............................................. 5.01
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Multiemployer Plan Valuations Following Mass Withdrawal
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 April 1998 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.
Issued in Washington, D.C., on this 9th day of March 1998.
David M. Strauss,
Executive Director, Pension Benefit Guaranty Corporation.
[FR Doc. 98-6506 Filed 3-12-98; 8:45 am]
BILLING CODE 7708-01-P