[Federal Register Volume 80, Number 240 (Tuesday, December 15, 2015)]
[Rules and Regulations]
[Pages 77569-77570]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-31568]


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PENSION BENEFIT GUARANTY CORPORATION

29 CFR Part 4022


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

AGENCY: Pension Benefit Guaranty Corporation.

ACTION: Final rule.

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SUMMARY: This final rule amends the Pension Benefit Guaranty 
Corporation's regulation on Benefits Payable in Terminated Single-
Employer Plans to prescribe interest assumptions under the regulation 
for valuation dates in January 2016. The interest assumptions are used 
for paying benefits under terminating single-employer plans covered by 
the pension insurance system administered by PBGC. 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 the first quarter of 2016.

DATES: Effective January 1, 2016.

FOR FURTHER INFORMATION CONTACT: Catherine B. Klion 
([email protected]), Assistant General Counsel for Regulatory 
Affairs, 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 regulation on Benefits Payable in 
Terminated Single-Employer Plans (29 CFR part 4022) prescribes 
actuarial assumptions--including interest assumptions--for paying plan 
benefits under terminating single-employer plans covered by title IV of 
the Employee Retirement Income Security Act of 1974. The interest 
assumptions in the regulation are also published on PBGC's Web site 
(http://www.pbgc.gov).
    PBGC uses the interest assumptions in Appendix B to Part 4022 to 
determine whether a benefit is payable as a lump sum and to determine 
the amount to pay. Appendix C to Part 4022 contains interest 
assumptions for private-sector pension practitioners to refer to if 
they wish to use lump-sum interest rates determined using PBGC's 
historical methodology. Currently, the rates in Appendices B and C of 
the benefit payment regulation are the same.
    The interest assumptions are intended to reflect current conditions 
in the financial and annuity markets. Assumptions under the benefit 
payments regulation are updated monthly. This final rule updates the 
benefit payments interest assumptions for January 2016.\1\
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    \1\ Appendix B to PBGC's regulation on Allocation of Assets in 
Single-Employer Plans (29 CFR part 4044) prescribes interest 
assumptions for valuing benefits under terminating covered single-
employer plans for purposes of allocation of assets under ERISA 
section 4044. Those assumptions are updated quarterly.
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    PBGC normally updates the assumptions under the benefit payments 
regulation for January at the same time as PBGC updates assumptions for 
the first quarter of the year under its regulation on Allocation of 
Assets in Single-Employer Plans (29 CFR part 4044) in a single 
rulemaking document. Because of delays in obtaining data used in 
setting assumptions under Part 4044 for the first quarter of 2016, PBGC 
is publishing two separate rulemaking documents to update the benefit 
payments regulation for January 2016 and the allocation regulation for 
the first quarter of 2016.
    The January 2016 interest assumptions under the benefit payments 
regulation will be 1.25 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. In comparison with the interest 
assumptions in effect for December 2015, these interest assumptions are 
unchanged.
    PBGC has determined that notice and public comment on this 
amendment are

[[Page 77570]]

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 payment 
of benefits under plans with valuation dates during January 2016, 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.

    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 267, as set forth below, is 
added to the table.

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

* * * * *

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                                          For plans with a valuation                                    Deferred annuities (percent)
                                                     date               Immediate  ---------------------------------------------------------------------
                Rate set                 ---------------------------- annuity rate
                                           On or after     Before       (percent)        i1            i2            i3            n1            n2
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                                                                      * * * * * * *
267.....................................       1-1-16        2-1-16          1.25          4.00          4.00          4.00             7             8
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0
3. In appendix C to part 4022, Rate Set 267, 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 valuation                                    Deferred annuities (percent)
                                                     date               Immediate  ---------------------------------------------------------------------
                Rate set                 ---------------------------- annuity rate
                                           On or after     Before       (percent)        i1            i2            i3            n1            n2
--------------------------------------------------------------------------------------------------------------------------------------------------------
 
                                                                      * * * * * * *
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267.....................................       1-1-16        2-1-16          1.25          4.00          4.00          4.00             7             8
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    Issued in Washington, DC, on this 9th day of December, 2015.
Judith Starr,
General Counsel, Pension Benefit Guaranty Corporation.
[FR Doc. 2015-31568 Filed 12-14-15; 8:45 am]
BILLING CODE 7709-02-P