81 FR 38948 - 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 81, Issue 115 (June 15, 2016)
Federal Register Volume 81, Issue 115 (June 15, 2016)
| Page Range | 38948-38950 | |
| FR Document | 2016-14076 |
[Federal Register Volume 81, Number 115 (Wednesday, June 15, 2016)] [Rules and Regulations] [Pages 38948-38950] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2016-14076] ======================================================================= ----------------------------------------------------------------------- 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 July 2016 and interest assumptions under the asset allocation regulation for valuation dates in the third quarter of 2016. 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 July 1, 2016. FOR FURTHER INFORMATION CONTACT: Deborah C. Murphy ([email protected]), Deputy 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 July 2016 and updates the asset allocation interest assumptions for the third quarter (July through September) of 2016. The third quarter 2016 interest assumptions under the allocation regulation will be 2.50 percent for the first 20 years following the valuation date and 2.85 percent thereafter. In comparison with the interest assumptions in effect for the second quarter of 2016, these interest assumptions represent no change in the select period (the period during which the select rate (the initial rate) applies), a decrease of 0.27 percent in the select rate, and a decrease of 0.01 percent in the ultimate rate (the final rate). [[Page 38949]] The July 2016 interest assumptions under the benefit payments regulation will be 0.75 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 June 2016, 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 July 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 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 273, 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 Deferred annuities (percent) valuation date Immediate ----------------------------------------------------------- Rate set -------------------------- annuity rate On or after Before (percent) i1 i2 i3 n1 n2 ---------------------------------------------------------------------------------------------------------------- * * * * * * * 273 7-1-16 8-1-16 0.75 4.00 4.00 4.00 7 8 ---------------------------------------------------------------------------------------------------------------- 0 3. In appendix C to part 4022, Rate Set 273, 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 Deferred annuities (percent) valuation date Immediate ----------------------------------------------------------- Rate set -------------------------- annuity rate On or after Before (percent) i1 i2 i3 n1 n2 ---------------------------------------------------------------------------------------------------------------- * * * * * * * 273 7-1-16 8-1-16 0.75 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 July-September 2016, 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 = ---------------------------------------------------------------------------------------------------------------- * * * * * * * July-September 2016........................... 0.0250 1-20 0.0285 >20 N/A N/A ---------------------------------------------------------------------------------------------------------------- [[Page 38950]] Issued in Washington, DC, on this 9th day of June 2016. Judith Starr, General Counsel, Pension Benefit Guaranty Corporation. [FR Doc. 2016-14076 Filed 6-14-16; 8:45 am] BILLING CODE 7709-02-P
![38948 Federal Register / Vol. 81, No. 115 / Wednesday, June 15, 2016 / Rules and Regulations
Subpart G—Measures To Protect the rendered in connection with a claim DATES: Effective July 1, 2016.
Integrity of the Compensation Program filed by or on behalf of that individual FOR FURTHER INFORMATION CONTACT:
under this title. Deborah C. Murphy (Murphy.Deborah@
§ 104.71 Procedures to prevent and detect (2) Exception. If the legal fee charged
fraud. PBGC.gov), Deputy Assistant General
in connection with the settlement of a
(a) Review of claims. For the purpose Counsel for Regulatory Affairs, Pension
civil action described in section
of detecting and preventing the payment Benefit Guaranty Corporation, 1200 K
405(c)(3)(C)(iii) of the Act of an
of fraudulent claims and for the purpose Street NW., Washington, DC 20005,
individual is less than 10 percent of the
of assuring accurate and appropriate 202–326–4024. (TTY/TDD users may
aggregate amount of compensation
payments to eligible claimants, the call the Federal relay service toll free at
awarded to such individual through
Special Master shall implement 1–800–877–8339 and ask to be
such settlement, the representative who
procedures to: connected to 202–326–4024.)
charged such legal fee to that individual
(1) Verify, authenticate, and audit may charge an amount for compensation SUPPLEMENTARY INFORMATION: PBGC’s
claims; for services rendered to the extent that regulations on Allocation of Assets in
(2) Analyze claim submissions to such amount charged is not more than Single-Employer Plans (29 CFR part
detect inconsistencies, irregularities, Ten (10) percent of such aggregate 4044) and Benefits Payable in
duplication, and multiple claimants; amount through the settlement, minus Terminated Single-Employer Plans (29
and the total amount of all legal fees charged CFR part 4022) prescribe actuarial
(3) Ensure the quality control of for services rendered in connection with assumptions—including interest
claims review procedures. such settlement. assumptions — for valuing and paying
(b) Quality control. The Special (c) Discretion to lower fee. In the event plan benefits under terminating single-
Master shall institute periodic quality that the Special Master finds that the fee employer plans covered by title IV of
control audits designed to evaluate the limit set by paragraph (a) or (b) of this the Employee Retirement Income
accuracy of submissions and the section provides excessive Security Act of 1974. The interest
accuracy of payments, subject to the compensation for services rendered in assumptions in the regulations are also
oversight of the Inspector General of the connection with such claim, the Special published on PBGC’s Web site (http://
Department of Justice. Master may, in the discretion of the www.pbgc.gov).
(c) False or fraudulent claims. The Special Master, award as reasonable The interest assumptions in Appendix
Special Master shall refer all evidence of compensation for services rendered an B to Part 4044 are used to value benefits
false or fraudulent claims to appropriate amount lesser than that permitted for in for allocation purposes under ERISA
law enforcement authorities. paragraph (a) of this section. section 4044. PBGC uses the interest
Dated: June 13, 2016. assumptions in Appendix B to Part 4022
Subpart H—Attorney Fees to determine whether a benefit is
Sheila L. Birnbaum,
§ 104.81 Limitation on attorney fees. Special Master. payable as a lump sum and to determine
(a) In general—(1) In general. [FR Doc. 2016–14259 Filed 6–13–16; 4:15 pm] the amount to pay. Appendix C to Part
Notwithstanding any contract, the BILLING CODE 4410–12–P
4022 contains interest assumptions for
representative of an individual may not private-sector pension practitioners to
charge, for services rendered in refer to if they wish to use lump-sum
connection with the claim of an interest rates determined using PBGC’s
PENSION BENEFIT GUARANTY
individual under this title, including historical methodology. Currently, the
CORPORATION
expenses routinely incurred in the rates in Appendices B and C of the
course of providing legal services, more 29 CFR Parts 4022 and 4044 benefit payment regulation are the same.
than 10 percent of an award paid under The interest assumptions are intended
this title on such claim. Expenses Allocation of Assets in Single- to reflect current conditions in the
incurred in connection with the claim of Employer Plans; Benefits Payable in financial and annuity markets.
an individual in this title other than Terminated Single-Employer Plans; Assumptions under the asset allocation
those that are routinely incurred in the Interest Assumptions for Valuing and regulation are updated quarterly;
course of providing legal services may Paying Benefits assumptions under the benefit payments
be charged to a claimant only if they AGENCY: Pension Benefit Guaranty regulation are updated monthly. This
have been approved by the Special Corporation. final rule updates the benefit payments
Master. interest assumptions for July 2016 and
ACTION: Final rule.
(2) Certification. In the case of any updates the asset allocation interest
claim in connection with which services SUMMARY: This final rule amends the assumptions for the third quarter (July
covered by this section were rendered, Pension Benefit Guaranty Corporation’s through September) of 2016.
the representative shall certify his or her regulations on Benefits Payable in The third quarter 2016 interest
compliance with this section and shall Terminated Single-Employer Plans and assumptions under the allocation
provide such information as the Special Allocation of Assets in Single-Employer regulation will be 2.50 percent for the
Master requires to ensure such Plans to prescribe interest assumptions first 20 years following the valuation
compliance. under the benefit payments regulation date and 2.85 percent thereafter. In
(b) Limitation—(1) In general. Except for valuation dates in July 2016 and comparison with the interest
as provided in paragraph (b)(2) of this interest assumptions under the asset assumptions in effect for the second
section, in the case of an individual who allocation regulation for valuation dates quarter of 2016, these interest
ehiers on DSK5VPTVN1PROD with RULES
was charged a legal fee in connection in the third quarter of 2016. The interest assumptions represent no change in the
with the settlement of a civil action assumptions are used for valuing and select period (the period during which
described in section 405(c)(3)(C)(iii) of paying benefits under terminating the select rate (the initial rate) applies),
the Act, the representative who charged single-employer plans covered by the a decrease of 0.27 percent in the select
such legal fee may not charge any pension insurance system administered rate, and a decrease of 0.01 percent in
amount for compensation for services by PBGC. the ultimate rate (the final rate).
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![38950 Federal Register / Vol. 81, No. 115 / Wednesday, June 15, 2016 / Rules and Regulations
Issued in Washington, DC, on this 9th day management tool for statistical analyses, comment necessitates withdrawal of
of June 2016. tracking, reporting, evaluating program this direct final rule, DoD will consider
Judith Starr, effectiveness, and conducting research. whether it warrants a substantive
General Counsel, Pension Benefit Guaranty This direct final rule is consistent with response in a notice and comment
Corporation. the rule currently published regarding process.
[FR Doc. 2016–14076 Filed 6–14–16; 8:45 am] DMDC 11, Investigative Records
Executive Order 12866, ‘‘Regulatory
BILLING CODE 7709–02–P Repository.
Planning and Review’’ and Executive
DATES: The rule is effective on Order 13563, ‘‘Improving Regulation
September 13, 2016 unless adverse and Regulatory Review’’
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Document Created: 2016-06-15 02:21:00
Document Modified: 2016-06-15 02:21:00
| 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 July 1, 2016. | |
| Contact | Deborah C. Murphy ([email protected]), Deputy 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 | 81 FR 38948 | |
| 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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