[Federal Register Volume 69, Number 50 (Monday, March 15, 2004)]
[Notices]
[Page 12187]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-5763]



[[Page 12187]]

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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 March 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 March 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 
March 2004. The interest assumptions for performing multiemployer plan 
valuations following mass withdrawal under part 4281 apply to valuation 
dates occurring in April 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 March 2004 is 4.19 percent (i.e., 85 percent of the 4.93 percent 
yield figure for February 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 March 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 March 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 payment years beginning 
between April 2003 and March 2004.

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                                                           The required
         For premium payment years beginning in:           interest rate
                                                                is:
------------------------------------------------------------------------
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
March 2004..............................................            4.19
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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 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 9th day of March 2004.
Joseph H. Grant,
Deputy Executive Director and Chief Operating Officer, Pension Benefit 
Guaranty Corporation.
[FR Doc. 04-5763 Filed 3-12-04; 8:45 am]
BILLING CODE 7708-01-P