[Federal Register Volume 73, Number 247 (Tuesday, December 23, 2008)]
[Rules and Regulations]
[Pages 78621-78622]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-30419]


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PENSION BENEFIT GUARANTY CORPORATION

29 CFR Part 4022


Benefits Payable in Terminated Single-Employer Plans; Interest 
Assumptions for Valuing and Paying Benefits

AGENCY: Pension Benefit Guaranty Corporation.

ACTION: Final rule.

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SUMMARY: Pension Benefit Guaranty Corporation's regulation on Benefits 
Payable in Terminated Single-Employer Plans prescribes interest 
assumptions for valuing and paying certain benefits under terminating 
single-employer plans. This final rule amends the benefit payments 
regulation to adopt interest assumptions for plans with valuation dates 
in January 2009. As discussed below, PBGC will publish a separate final 
rule document dealing with interest assumptions under its regulation on 
Allocation of Assets in Single-Employer Plans for January 2009. 
Interest assumptions are also published on PBGC's Web site (http://www.pbgc.gov).

DATES: Effective January 1, 2009.

FOR FURTHER INFORMATION CONTACT: Catherine B. Klion, Manager, 
Regulatory and Policy Division, Legislative and Regulatory Department, 
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: PBGC's regulations prescribe actuarial 
assumptions--including interest assumptions--for valuing and paying 
plan benefits of terminating single-employer plans covered by title IV 
of the Employee Retirement Income Security Act of 1974. The interest 
assumptions are intended to reflect current conditions in the financial 
and annuity markets.
    These interest assumptions are found in two PBGC regulations: the 
regulation on Benefits Payable in Terminated Single-Employer Plans (29 
CFR part 4022) and the regulation on Allocation of Assets in Single-
Employer Plans (29 CFR part 4044). PBGC normally updates the 
assumptions under the two regulations each month in a single rulemaking 
document. Because of delays in obtaining data used in setting the 
assumptions for January 2009, PBGC is publishing two rulemaking 
documents to update the two regulations for January 2009. This document 
is a final rule updating the benefit payments regulation.
    Two sets of interest assumptions are prescribed under the benefit 
payments regulation: (1) A set for the PBGC to use to determine whether 
a benefit is payable as a lump sum and to determine lump-sum amounts to 
be paid by the PBGC (found in Appendix B to Part 4022), and (2) a set 
for private-sector pension practitioners to refer to if they wish to 
use lump-sum interest rates determined using the PBGC's historical 
methodology (found in Appendix C to Part 4022).
    This amendment (1) adds to Appendix B to Part 4022 the interest 
assumptions for the PBGC to use for its own lump-sum payments in plans 
with valuation dates during January 2009, and (2) adds to Appendix C to 
Part 4022 the interest assumptions for private-sector pension 
practitioners to refer to if they wish to use lump-sum interest rates 
determined using the PBGC's historical methodology for valuation dates 
during January 2009.
    The interest assumptions that the PBGC will use for its own lump-
sum payments (set forth in Appendix B to part 4022) will be 4.00 
percent for the period during which a benefit is in pay status and 4.00 
percent during any years preceding the benefit's placement in pay 
status. These interest assumptions represent a decrease (from those in 
effect for December 2008) of 0.75 percent in the immediate annuity rate 
and are otherwise unchanged. For private-sector payments, the interest 
assumptions (set forth in Appendix C to part 4022) will be the same as 
those used by the PBGC for determining and paying lump sums (set forth 
in Appendix B to part 4022).
    The PBGC has determined that notice and public comment on this 
amendment are impracticable and contrary to the public interest. This 
finding is based on the need to determine and issue new interest 
assumptions promptly so that the assumptions can reflect current market 
conditions as accurately as possible.
    Because of the need to provide immediate guidance for the valuation 
and payment of benefits in plans with valuation dates during January 
2009, the PBGC finds that good cause exists for making the assumptions 
set forth in this amendment effective less than 30 days after 
publication.
    The PBGC has determined that this action is not a ``significant 
regulatory action'' under the criteria set forth in Executive Order 
12866.
    Because no general notice of proposed rulemaking is required for 
this amendment, the Regulatory Flexibility Act of 1980 does not apply. 
See 5 U.S.C. 601(2).

List of Subjects in 29 CFR Part 4022

    Employee benefit plans, Pension insurance, Pensions, Reporting and 
recordkeeping requirements.

0
In consideration of the foregoing, 29 CFR part 4022 is amended as 
follows:

PART 4022--BENEFITS PAYABLE IN TERMINATED SINGLE--EMPLOYER PLANS

0
1. The authority citation for part 4022 continues to read as follows:

    Authority: 29 U.S.C. 1302, 1322, 1322b, 1341(c)(3)(D), and 1344.


0
2. In appendix B to part 4022, Rate Set 183, as set forth below, is 
added to the table.

Appendix B to Part 4022--Lump Sum Interest Rates For PBGC Payments

* * * * *

[[Page 78622]]



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                                For plans with a                         Deferred annuities  (percent)
                                 valuation date     Immediate --------------------------------------------------
          Rate set           ----------------------  annuity
                                On or                  rate        i1         i2         i3        n1       n2
                                after      Before   (percent)
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------
183.........................     1-1-09     2-1-09       4.00       4.00       4.00       4.00        7        8
----------------------------------------------------------------------------------------------------------------

0
3. In appendix C to part 4022, Rate Set 183, as set forth below, is 
added to the table.

Appendix C to Part 4022--Lump Sum Interest Rates For Private-Sector 
Payments

* * * * *

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                                For plans with a                         Deferred annuities  (percent)
                                 valuation date     Immediate --------------------------------------------------
          Rate set           ----------------------  annuity
                                On or                  rate        i1         i2         i3        n1       n2
                                after      Before   (percent)
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------
183.........................     1-1-09     2-1-09       4.00       4.00       4.00       4.00        7        8
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    Issued in Washington, DC, on this 16th day of December 2008.
Vincent K. Snowbarger,
Deputy Director for Operations, Pension Benefit Guaranty Corporation.
[FR Doc. E8-30419 Filed 12-22-08; 8:45 am]
BILLING CODE 7709-01-P