[Federal Register Volume 61, Number 200 (Tuesday, October 15, 1996)]
[Notices]
[Pages 53772-53773]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-26344]


=======================================================================
-----------------------------------------------------------------------

PENSION BENEFIT GUARANTY CORPORATION


Interest Assumption for Determining Variable-Rate Premium; 
Interest on Late Premium Payments; Interest on Underpayments and 
Overpayments of Single-Employer Plan Termination Liability and 
Multiemployer Withdrawal Liability; Interest Assumptions for 
Multiemployer Plan Valuations Following Mass Withdrawal

AGENCY: Pension Benefit Guaranty Corporation.

ACTION: Notice of interest rates and assumptions.

-----------------------------------------------------------------------

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 October 
1996. The interest assumptions for performing multiemployer plan 
valuations following mass withdrawal under part 4281 apply to valuation 
dates occuring in November 1996. The interest rates for late premium 
payments under part 4007 and for underpayments and overpayments of 
single-employer plan termination liability under part 4062 and 
multiemployer withdrawal liability under part 4219 apply to interest 
accruing during the fourth quarter (October through December) of 1996.

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:

Variable-rate Premiums

    Section 4006(a)(3)(E)(iii)(II) of the Employee Retirement Income 
Security Act of 1974 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 a specified percentage (currently 80 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''). The yield figure is reported in Federal 
Reserve Statistical Releases G.13 and H.15.
    The assumed interest rate to be used in determining variable-rate 
premiums for premium payment years beginning in October 1996 (i.e., 80 
percent of the yield figure for September 1996) is 5.62 percent. The 
following table lists the assumed interest rates to be used in 
determining variable-rate premiums for premium payment years beginning 
between November 1995 and October 1996.

------------------------------------------------------------------------
                                                           The required 
         For premium payment years beginning in:           interest rate
                                                                is:     
------------------------------------------------------------------------
November 1995...........................................            5.10
December 1995...........................................            5.01
January 1996............................................            4.85
February 1996...........................................            4.84
March 1996..............................................            4.99
April 1996..............................................            5.28
May 1996................................................            5.43
June 1996...............................................            5.54
July 1996...............................................            5.65
August 1996.............................................            5.62
September 1996..........................................            5.47
October 1996............................................            5.62
------------------------------------------------------------------------

Late Premium Payments; Underpayments and Overpayments of Single-
employer Plan Termination Liability

    Section 4007(b) of ERISA and Sec. 4007.7(a) of the PBGC's 
regulation on Payment of Premiums (29 CFR part 4007) require the 
payment of interest on late premium payments at the rate established 
under section 6601 of the Internal Revenue Code. Similarly, Sec. 4062.7 
of the PBGC's regulation on Liability for Termination of Single-
employer Plans (29 CFR part 4062) requires that interest be charged or 
credited at the section 6601 rate on underpayments and overpayments of 
employer liability under section 4062 of ERISA. The section 6601 rate 
is established periodically (currently quarterly) by the Internal 
Revenue Service. The rate applicable to the fourth quarter (October 
through December) of 1996, as announced by the IRS, is 9 percent.
    The following table lists the late payment interest rates for 
premiums and employer liability for the specified time periods:

------------------------------------------------------------------------
                                                               Interest 
               From--                       Through--            rate   
                                                              (percent) 
------------------------------------------------------------------------
10/1/89............................  3/31/91...............           11
4/1/91.............................  12/31/91..............           10
1/1/92.............................  3/31/92...............            9
4/1/92.............................  9/30/92...............            8
10/1/92............................  6/30/94...............            7
7/1/94.............................  9/30/94...............            8
10/1/94............................  3/31/95...............            9
4/1/95.............................  6/30/95...............           10
7/1/95.............................  3/31/96...............            9
4/1/96.............................  6/30/96...............            8
7/1/96.............................  12/31/96..............            9
------------------------------------------------------------------------

Underpayments and Overpayments of Multiemployer Withdrawal 
Liability

    Section 4219.32(b) of the PBGC's regulation on Notice, Collection, 
and Redetermination of Withdrawal Liability (29 CFR part 4219) 
specifies the rate at which a multiemployer plan is to charge or credit 
interest on underpayments and overpayments of withdrawal liability 
under section 4219 of ERISA unless an applicable plan provision 
provides otherwise. For interest accruing during any calendar quarter, 
the specified rate is the average quoted prime rate on short-term 
commercial loans for the fifteenth day (or the next business day if the 
fifteenth day is not a business day) of the month preceding the 
beginning of the quarter, as reported by the Board of Governors of the 
Federal Reserve System in Statistical Release H.15 (``Selected Interest 
Rates''). The rate for the fourth quarter (October through December) of 
1996 (i.e., the rate reported for September 16, 1996) is 8.25 percent.
    The following table lists the withdrawal liability underpayment and 
overpayment interest rates for the specified time periods:

[[Page 53773]]



------------------------------------------------------------------------
                                                               Interest 
               From--                       Through--            rate   
                                                              (percent) 
------------------------------------------------------------------------
4/1/90.............................  3/31/91...............        10.00
4/1/91.............................  6/30/91...............         9.00
7/1/91.............................  9/30/91...............         8.50
10/1/91............................  12/31/91..............         8.00
1/1/92.............................  3/31/92...............         7.50
4/1/92.............................  9/30/92...............         6.50
10/1/92............................  6/30/94...............         6.00
7/1/94.............................  9/30/94...............         7.25
10/1/94............................  12/31/94..............         7.75
1/1/95.............................  3/31/95...............         8.50
4/1/95.............................  9/30/95...............         9.00
10/1/95............................  3/31/96...............         8.75
4/1/96.............................  12/31/96..............         8.25
------------------------------------------------------------------------

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 November 1996 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, DC, on this 9th day of October 1996.
Martin Slate,
Executive Director, Pension Benefit Guaranty Corporation.
[FR Doc. 96-26344 Filed 10-11-96; 8:45 am]
BILLING CODE 7708-01-P