[Federal Register Volume 65, Number 136 (Friday, July 14, 2000)]
[Notices]
[Pages 43790-43791]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-17912]


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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.

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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 web site 
(http://www.pbgc.gov).

DATES: The interest rate for determining the variable-rate premium 
under part 4006 applies to premium payment years beginning in July 
2000. The interest assumptions for performing multiemployer plan 
valuations

[[Page 43791]]

following mass withdrawal under part 4281 apply to valuation dates 
occurring in August 2000. 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 third quarter (July through September) of 2000.

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'' (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''). 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 July 2000 is 5.04 
percent (i.e., 85 percent of the 5.93 percent yield figure for June 
2000).
    The following table lists the assumed interest rates to be used in 
determining variable-rate premiums for premium payment years beginning 
between August 1999 and July 2000.

------------------------------------------------------------------------
                                                                  The
                                                               assumed
           For premium payment years beginning in:             interest
                                                               rate is:
------------------------------------------------------------------------
 August 1999...............................................         5.08
 September 1999............................................         5.16
 October 1999..............................................         5.16
 November 1999.............................................         5.32
 December 1999.............................................         5.23
 January 2000..............................................         5.40
 February 2000.............................................         5.64
 March 2000................................................         5.30
 April 2000................................................         5.14
 May 2000..................................................         4.97
 June 2000.................................................         5.23
 July 2000.................................................         5.04
------------------------------------------------------------------------

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 third quarter (July through 
September) of 2000, 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)
------------------------------------------------------------------------
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.............................  3/31/98...............            9
4/1/98.............................  12/31/98..............            8
1/1/99.............................  3/31/99...............            7
4/1/99.............................  3/31/00...............            8
4/1/00.............................  9/30/00...............            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 third quarter (July through September) of 
2000 (i.e., the rate reported for June 15, 2000) is 9.50 percent.
    The following table lists the withdrawal liability underpayment and 
overpayment interest rates for the specified time periods:

------------------------------------------------------------------------
                                                               Interest
               From--                       Through--            rate
                                                              (percent)
------------------------------------------------------------------------
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.............................  6/30/97...............         8.25
7/1/97.............................  12/31/98..............         8.50
1/1/99.............................  9/30/99...............         7.75
10/1/99............................  12/31/99..............         8.25
1/1/00.............................  3/31/00...............         8.50
4/1/00.............................  6/30/00...............         8.75
7/1/00.............................  9/30/00...............         9.50
------------------------------------------------------------------------

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 August 2000 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 7th day of July 2000.
David M. Strauss,
Executive Director, Pension Benefit Guaranty Corporation.
[FR Doc. 00-17912 Filed 7-13-00; 8:45 am]
BILLING CODE 7708-01-P