80 FR 55249 - Allocation of Assets in Single-Employer Plans; Benefits Payable in Terminated Single-Employer Plans; Interest Assumptions for Valuing and Paying Benefits
PENSION BENEFIT GUARANTY CORPORATION Federal Register Volume 80, Issue 178 (September 15, 2015)
Federal Register Volume 80, Issue 178 (September 15, 2015)
| Page Range | 55249-55250 | |
| FR Document | 2015-23231 |
[Federal Register Volume 80, Number 178 (Tuesday, September 15, 2015)] [Rules and Regulations] [Pages 55249-55250] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2015-23231] ======================================================================= ----------------------------------------------------------------------- PENSION BENEFIT GUARANTY CORPORATION 29 CFR Parts 4022 and 4044 Allocation of Assets in Single-Employer Plans; Benefits Payable in Terminated Single-Employer Plans; Interest Assumptions for Valuing and Paying Benefits AGENCY: Pension Benefit Guaranty Corporation. ACTION: Final rule. ----------------------------------------------------------------------- SUMMARY: This final rule amends the Pension Benefit Guaranty Corporation's regulations on Benefits Payable in Terminated Single- Employer Plans and Allocation of Assets in Single-Employer Plans to prescribe interest assumptions under the benefit payments regulation for valuation dates in October 2015 and interest assumptions under the asset allocation regulation for valuation dates in the fourth quarter of 2015. The interest assumptions are used for valuing and paying benefits under terminating single-employer plans covered by the pension insurance system administered by PBGC. DATES: Effective October 1, 2015. 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 regulations on Allocation of Assets in Single-Employer Plans (29 CFR part 4044) and Benefits Payable in Terminated Single-Employer Plans (29 CFR part 4022) prescribe actuarial assumptions--including interest assumptions--for valuing and 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 regulations are also published on PBGC's Web site (http://www.pbgc.gov). The interest assumptions in Appendix B to Part 4044 are used to value benefits for allocation purposes under ERISA section 4044. 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 asset allocation regulation are updated quarterly; assumptions under the benefit payments regulation are updated monthly. This final rule updates the benefit payments interest assumptions for October 2015 and updates the asset allocation interest assumptions for the fourth quarter (October through December) of 2015. The fourth quarter 2015 interest assumptions under the allocation regulation will be 2.46 percent for the first 20 years following the valuation date and 2.98 percent thereafter. In comparison with the interest assumptions in effect for the third quarter of 2015, these interest assumptions represent no change in the select period (the period during which the select rate (the initial rate) applies), an increase of 0.14 percent in the select rate, and an increase of 0.68 percent in the ultimate rate (the final rate). The October 2015 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 September 2015, these interest assumptions are unchanged. 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 under plans with valuation dates during October 2015, 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 29 CFR Part 4022 Employee benefit plans, Pension insurance, Pensions, Reporting and recordkeeping requirements. 29 CFR Part 4044 Employee benefit plans, Pension insurance, Pensions. In consideration of the foregoing, 29 CFR parts 4022 and 4044 are 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 264, as set forth below, is added to the table. Appendix B to Part 4022--Lump Sum Interest Rates for PBGC Payments * * * * * [[Page 55250]] -------------------------------------------------------------------------------------------------------------------------------------------------------- For plans with a valuation date Immediate Deferred annuities (percent) Rate set ---------------------------------- annuity rate ------------------------------------------------------------------------------------ On or after Before (percent) i1 i2 i3 n1 n2 -------------------------------------------------------------------------------------------------------------------------------------------------------- * * * * * * * 264 10-1-15 11-1-15 1.25 4.00 4.00 4.00 7 8 -------------------------------------------------------------------------------------------------------------------------------------------------------- 0 3. In appendix C to part 4022, Rate Set 264, 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 date Immediate Deferred annuities (percent) Rate set ---------------------------------- annuity rate ------------------------------------------------------------------------------------ On or after Before (percent) i1 i2 i3 n1 n2 -------------------------------------------------------------------------------------------------------------------------------------------------------- * * * * * * * 264 10-1-15 11-1-15 1.25 4.00 4.00 4.00 7 8 -------------------------------------------------------------------------------------------------------------------------------------------------------- PART 4044--ALLOCATION OF ASSETS IN SINGLE-EMPLOYER PLANS 0 4. The authority citation for part 4044 continues to read as follows: Authority: 29 U.S.C. 1301(a), 1302(b)(3), 1341, 1344, 1362. 0 5. In appendix B to part 4044, a new entry for October-December 2015, as set forth below, is added to the table. Appendix B to Part 4044--Interest Rates Used to Value Benefits * * * * * ---------------------------------------------------------------------------------------------------------------- The values of it are: For valuation dates occurring ---------------------------------------------------------------------------------- in the month-- it for t = it for t = it for t = ---------------------------------------------------------------------------------------------------------------- * * * * * * * October-December 2015........ 0.0246 1-20 0.0298 >20 N/A N/A ---------------------------------------------------------------------------------------------------------------- Issued in Washington, DC, on this 10th day of September 2015. Judith Starr, General Counsel, Pension Benefit Guaranty Corporation. [FR Doc. 2015-23231 Filed 9-14-15; 8:45 am] BILLING CODE 7709-02-P
![Federal Register / Vol. 80, No. 178 / Tuesday, September 15, 2015 / Rules and Regulations 55249
§ 70.413 [Amended] for Regulatory Affairs, Pension Benefit regulation will be 1.25 percent for the
■ 9. In § 70.413: Guaranty Corporation, 1200 K Street period during which a benefit is in pay
■ a. Paragraph (c)(2)(ii) is amended by NW., Washington, DC 20005, 202–326– status and 4.00 percent during any years
removing the words ‘‘as 4024. (TTY/TDD users may call the preceding the benefit’s placement in pay
unmerchantable,’’; Federal relay service toll free at 1–800– status. In comparison with the interest
■ b. Paragraph (d)(2) is amended by 877–8339 and ask to be connected to assumptions in effect for September
removing the words ‘‘unmerchantable 202–326–4024.) 2015, these interest assumptions are
domestic’’; and SUPPLEMENTARY INFORMATION: PBGC’s unchanged.
■ c. The first parenthetical phrase at the regulations on Allocation of Assets in PBGC has determined that notice and
end of the section is amended by Single-Employer Plans (29 CFR part public comment on this amendment are
removing the Office of Management and 4044) and Benefits Payable in impracticable and contrary to the public
Budget control number ‘‘1512–0141’’ Terminated Single-Employer Plans (29 interest. This finding is based on the
and adding, in its place, the number CFR part 4022) prescribe actuarial need to determine and issue new
‘‘1513–0030’’. assumptions—including interest interest assumptions promptly so that
§ 70.414 [Amended]
assumptions—for valuing and paying the assumptions can reflect current
plan benefits under terminating single- market conditions as accurately as
■ 10. Section 70.414 is amended by employer plans covered by title IV of possible.
removing the words ‘‘unmerchantable the Employee Retirement Income Because of the need to provide
domestic’’ from paragraph (d)(3). Security Act of 1974. The interest immediate guidance for the valuation
Signed: June 11, 2015. assumptions in the regulations are also and payment of benefits under plans
John J. Manfreda, published on PBGC’s Web site (http:// with valuation dates during October
Administrator. www.pbgc.gov). 2015, PBGC finds that good cause exists
Approved: June 19, 2015. The interest assumptions in Appendix for making the assumptions set forth in
B to Part 4044 are used to value benefits this amendment effective less than 30
Timothy E. Skud,
for allocation purposes under ERISA days after publication.
Deputy Assistant Secretary (Tax, Trade, and
section 4044. PBGC uses the interest PBGC has determined that this action
Tariff Policy).
assumptions in Appendix B to Part 4022 is not a ‘‘significant regulatory action’’
[FR Doc. 2015–23132 Filed 9–14–15; 8:45 am]
to determine whether a benefit is under the criteria set forth in Executive
BILLING CODE 4810–31–P
payable as a lump sum and to determine Order 12866.
the amount to pay. Appendix C to Part Because no general notice of proposed
4022 contains interest assumptions for rulemaking is required for this
PENSION BENEFIT GUARANTY private-sector pension practitioners to
CORPORATION amendment, the Regulatory Flexibility
refer to if they wish to use lump-sum Act of 1980 does not apply. See 5 U.S.C.
interest rates determined using PBGC’s 601(2).
29 CFR Parts 4022 and 4044 historical methodology. Currently, the
Allocation of Assets in Single- rates in Appendices B and C of the List of Subjects
Employer Plans; Benefits Payable in benefit payment regulation are the same. 29 CFR Part 4022
Terminated Single-Employer Plans; The interest assumptions are intended
Interest Assumptions for Valuing and to reflect current conditions in the Employee benefit plans, Pension
Paying Benefits financial and annuity markets. insurance, Pensions, Reporting and
Assumptions under the asset allocation recordkeeping requirements.
AGENCY: Pension Benefit Guaranty regulation are updated quarterly;
Corporation. 29 CFR Part 4044
assumptions under the benefit payments
ACTION: Final rule. regulation are updated monthly. This Employee benefit plans, Pension
final rule updates the benefit payments insurance, Pensions.
SUMMARY: This final rule amends the interest assumptions for October 2015
Pension Benefit Guaranty Corporation’s In consideration of the foregoing, 29
and updates the asset allocation interest CFR parts 4022 and 4044 are amended
regulations on Benefits Payable in assumptions for the fourth quarter
Terminated Single-Employer Plans and as follows:
(October through December) of 2015.
Allocation of Assets in Single-Employer The fourth quarter 2015 interest PART 4022—BENEFITS PAYABLE IN
Plans to prescribe interest assumptions assumptions under the allocation TERMINATED SINGLE-EMPLOYER
under the benefit payments regulation regulation will be 2.46 percent for the PLANS
for valuation dates in October 2015 and first 20 years following the valuation
interest assumptions under the asset date and 2.98 percent thereafter. In ■ 1. The authority citation for part 4022
allocation regulation for valuation dates comparison with the interest continues to read as follows:
in the fourth quarter of 2015. The assumptions in effect for the third
interest assumptions are used for Authority: 29 U.S.C. 1302, 1322, 1322b,
quarter of 2015, these interest 1341(c)(3)(D), and 1344.
valuing and paying benefits under assumptions represent no change in the
terminating single-employer plans select period (the period during which ■ 2. In appendix B to part 4022, Rate Set
covered by the pension insurance the select rate (the initial rate) applies), 264, as set forth below, is added to the
system administered by PBGC. an increase of 0.14 percent in the select table.
mstockstill on DSK4VPTVN1PROD with RULES
DATES: Effective October 1, 2015. rate, and an increase of 0.68 percent in
FOR FURTHER INFORMATION CONTACT: the ultimate rate (the final rate). Appendix B to Part 4022—Lump Sum
Catherine B. Klion (Klion.Catherine@ The October 2015 interest Interest Rates for PBGC Payments
PBGC.gov), Assistant General Counsel assumptions under the benefit payments * * * * *
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![55250 Federal Register / Vol. 80, No. 178 / Tuesday, September 15, 2015 / Rules and Regulations
For plans with a valuation Deferred annuities
Immediate
date (percent)
Rate set annuity rate
(percent)
On or after Before i1 i2 i3 n1 n2
* * * * * * *
264 10–1–15 11–1–15 1.25 4.00 4.00 4.00 7 8
■ 3. In appendix C to part 4022, Rate Set Appendix C to Part 4022—Lump Sum
264, as set forth below, is added to the Interest Rates for Private-Sector
table. Payments
* * * * *
For plans with a valuation Deferred annuities
Immediate
date (percent)
Rate set annuity rate
(percent)
On or after Before i1 i2 i3 n1 n2
* * * * * * *
264 10–1–15 11–1–15 1.25 4.00 4.00 4.00 7 8
PART 4044—ALLOCATION OF Authority: 29 U.S.C. 1301(a), 1302(b)(3), Appendix B to Part 4044—Interest
ASSETS IN SINGLE-EMPLOYER 1341, 1344, 1362. Rates Used to Value Benefits
PLANS * * * * *
■ 5. In appendix B to part 4044, a new
■ 4. The authority citation for part 4044 entry for October–December 2015, as set
continues to read as follows: forth below, is added to the table.
The values of it are:
For valuation dates occurring in the month—
it for t = it for t = it for t =
* * * * * * *
October–December 2015 ..................................................... 0.0246 1–20 0.0298 >20 N/A N/A
Issued in Washington, DC, on this 10th day health plan available for purchase contingency operation for more than 30
of September 2015. worldwide by qualified members of the days.
Judith Starr, Ready Reserve and by qualified DATES: This rule is effective October 15,
General Counsel, Pension Benefit Guaranty survivors of TRS members. TRICARE 2015.
Corporation. Dental Program (TDP) is a premium-
[FR Doc. 2015–23231 Filed 9–14–15; 8:45 am] FOR FURTHER INFORMATION CONTACT:
based TRICARE dental plan available
Brian Smith, Defense Health Agency,
BILLING CODE 7709–02–P for purchase worldwide by qualified
TRICARE Health Plan Division,
Service members. This final rule revises
telephone (703) 681–0039.
requirements and procedures for the
DEPARTMENT OF DEFENSE Questions regarding payment of
TRS program to specify the appropriate
specific claims under the TRICARE
actuarial basis for calculating premiums
Office of the Secretary allowable charge method should be
in addition to making other minor
addressed to the appropriate TRICARE
clarifying administrative changes. For a contractor.
32 CFR Part 199
member who is involuntarily separated
[DOD–2006–HA–0207] from the Selected Reserve under other SUPPLEMENTARY INFORMATION:
RIN 0720–AB15 than adverse conditions this final rule I. Introduction and Background
provides a time-limited exception that
Civilian Health and Medical Program of allows TRS coverage in effect to A. Overview
the Uniformed Services (CHAMPUS); continue for up to 180 days after the An interim final rule was published
TRICARE Reserve Select; TRICARE date on which the member is separated in the Federal Register on August 20,
Dental Program; Early Eligibility for from the Selected Reserve and TDP 2007 (72 FR 46380). That interim final
mstockstill on DSK4VPTVN1PROD with RULES
TRICARE for Certain Reserve coverage in effect to continue for no less rule addressed provisions of the
Component Members than 180 days after the separation date. National Defense Authorization Act for
AGENCY: Office of the Secretary, DoD. It also expands early TRICARE Fiscal Year 2007 (NDAA–07) (Pub. L.
ACTION: Final rule. eligibility for certain Reserve 109–364),which expanded eligibility for
Component members from a maximum the TRICARE Reserve Select program to
SUMMARY: TRICARE Reserve Select of 90 days to a maximum of 180 days include all Selected Reservists except
(TRS) is a premium-based TRICARE prior to activation in support of a those individuals either enrolled or
VerDate Sep<11>2014 19:08 Sep 14, 2015 Jkt 235001 PO 00000 Frm 00030 Fmt 4700 Sfmt 4700 E:\FR\FM\15SER1.SGM 15SER1](https://thefederalregister.org/doc/80_FR_55427/page/2.svg)
Document Created: 2015-12-15 10:09:55
Document Modified: 2015-12-15 10:09:55
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Rules and Regulations | |
| Action | Final rule. | |
| Dates | Effective October 1, 2015. | |
| 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.) | |
| FR Citation | 80 FR 55249 | |
| CFR Citation | 29
CFR
4022 29 CFR 4044 | |
| CFR Associated | Employee Benefit Plans; Pension Insurance; Pensions and Reporting and Recordkeeping Requirements |
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