[Federal Register Volume 74, Number 11 (Friday, January 16, 2009)]
[Rules and Regulations]
[Pages 2863-2864]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-832]


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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 February 2009. As discussed below, this final rule does not address 
the interest assumptions under PBGC's regulation on Allocation of 
Assets in Single-Employer Plans. Interest assumptions are also 
published on PBGC's Web site (http://www.pbgc.gov).

DATES: Effective February 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). Before 2009, PBGC updated the 
assumptions under the two regulations each month in a single rulemaking 
document. In a final rule published in the Federal Register on December 
29, 2008 (at 73 FR 79362), PBGC announced a change in its practice for 
determining the interest assumptions for use under the asset allocation 
regulation. As explained in the preamble to that final rule (73 FR 
79362 at 79363), the new practice leads to assumptions that remain 
unchanged within a calendar quarter. Accordingly, the assumptions 
published December 29, 2008, remain in effect for January, February, 
and March 2009, and need not be updated for February 2009. Thus this 
final rule document updates the benefit payments regulation only. 
Similarly, future updates to the asset allocation regulation will be 
made quarterly rather than monthly; between quarterly updates of the 
asset allocation regulation, only the benefit payment regulation will 
be updated each month.
    Two sets of interest assumptions are prescribed under the benefit 
payments regulation: (1) A set for PBGC to use to determine whether a 
benefit is payable as a lump sum and to determine lump-sum amounts to 
be paid by 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 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 PBGC to use for its own lump-sum payments in plans with 
valuation dates during February 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 PBGC's historical

[[Page 2864]]

methodology for valuation dates during February 2009.
    The interest assumptions that PBGC will use for its own lump-sum 
payments (set forth in Appendix B to part 4022) will be 3.00 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 
January 2009) of 1.00 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 PBGC for determining and paying lump sums (set forth in 
Appendix B to part 4022).
    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 February 
2009, PBGC finds that good cause exists for making the assumptions set 
forth in this amendment effective less than 30 days after publication.
    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 184, as set forth below, is 
added to the table.

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

* * * * *

--------------------------------------------------------------------------------------------------------------------------------------------------------
                  For plans with a valuation                                            Deferred annuities (percent)
                             date                  Immediate   -----------------------------------------------------------------------------
   Rate set    --------------------------------  annuity rate
                  On or after       Before         (percent)          i1              i2              i3              n1             n2
--------------------------------------------------------------------------------------------------------------------------------------------
 
                                                                      * * * * * * *
         184          2-1-09          3-1-09            3.00            4.00            4.00            4.00               7              8
--------------------------------------------------------------------------------------------------------------------------------------------------------


0
3. In appendix C to part 4022, Rate Set 184, as set forth below, is 
added to the table.

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

* * * * *

--------------------------------------------------------------------------------------------------------------------------------------------------------
                  For plans with a valuation                                            Deferred annuities (percent)
                             date                  Immediate   -----------------------------------------------------------------------------
   Rate set    --------------------------------  annuity rate
                  On or after       Before         (percent)          i1              i2              i3              n1             n2
--------------------------------------------------------------------------------------------------------------------------------------------
 
                                                                      * * * * * * *
         184          2-1-09          3-1-09            3.00            4.00            4.00            4.00               7              8
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    Issued in Washington, DC, on this 12th day of January 2009.
Vincent K. Snowbarger,
Deputy Director for Operations, Pension Benefit Guaranty Corporation.
 [FR Doc. E9-832 Filed 1-15-09; 8:45 am]
BILLING CODE 7709-01-P