[Federal Register Volume 69, Number 30 (Friday, February 13, 2004)]
[Notices]
[Pages 7265-7266]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-3245]


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PENSION BENEFIT GUARANTY CORPORATION


Required Interest Rate 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 can be derived 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).
    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.

DATES: 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.

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. 
(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.)

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 (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 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.
    The following table lists the required interest rates to be used in 
determining variable-rate premiums for premium

[[Page 7266]]

payment years beginning between March 2003 and February 2004.

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                                                           The required
         For premium payment years beginning in:           interest rate
                                                                is:
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March 2003..............................................            4.81
April 2003..............................................            4.80
May 2003................................................            4.90
June 2003...............................................            4.53
July 2003...............................................            4.37
August 2003.............................................            4.93
September 2003..........................................            5.31
October 2003............................................            5.14
November 2003...........................................            5.16
December 2003...........................................            5.12
January 2004............................................            4.31
February 2004...........................................            4.23
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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 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.

    Issued in Washington, DC, on this 10th day of February 2004.
Joseph H. Grant,
Deputy Executive Director and Chief Operating Officer, Pension Benefit 
Guaranty Corporation.
[FR Doc. 04-3245 Filed 2-12-04; 8:45 am]
BILLING CODE 7708-01-P