81 FR 93599 - Allocation of Assets in Single-Employer Plans; Interest Assumptions for Valuing Benefits

PENSION BENEFIT GUARANTY CORPORATION

Federal Register Volume 81, Issue 245 (December 21, 2016)

This final rule amends the Pension Benefit Guaranty Corporation's regulation on Allocation of Assets in Single-Employer Plans to prescribe interest assumptions under the asset allocation regulation for valuation dates in the first quarter of 2017. The interest assumptions are used for valuing benefits under terminating single-employer plans covered by the pension insurance system administered by PBGC. As discussed below, PBGC has published a separate final rule document dealing with interest assumptions under its regulation on Benefits Payable in Terminated Single-Employer Plans for January 2017.

[Federal Register Volume 81, Number 245 (Wednesday, December 21, 2016)]
[Rules and Regulations]
[Pages 93599-93600]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-30634]


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PENSION BENEFIT GUARANTY CORPORATION

29 CFR Part 4044


Allocation of Assets in Single-Employer Plans; Interest 
Assumptions for Valuing 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 Allocation of Assets in Single-Employer 
Plans to prescribe interest assumptions under the asset allocation 
regulation for valuation dates in the first quarter of 2017. The 
interest assumptions are used for valuing benefits under terminating 
single-employer plans covered by the pension insurance system 
administered by PBGC. As discussed below, PBGC has published a separate 
final rule document dealing with interest assumptions under its 
regulation on Benefits Payable in Terminated Single-Employer Plans for 
January 2017.

DATES: Effective January 1, 2017.

FOR FURTHER INFORMATION CONTACT: Deborah C. Murphy 
([email protected]), Assistant General Counsel for Regulatory 
Affairs, Office of the General Counsel, Pension Benefit Guaranty 
Corporation, 1200 K Street NW., Washington, DC 20005, 202-326-4400 ext. 
3451. (TTY/TDD users may call the Federal relay service toll free at 1-
800-877-8339 and ask to be connected to 202-326-4400 ext. 3451.)

SUPPLEMENTARY INFORMATION: PBGC's regulation on Allocation of Assets in 
Single-Employer Plans (29 CFR part 4044) prescribes actuarial 
assumptions--including interest assumptions--for valuing 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).
    The interest assumptions in Appendix B to Part 4044 are used to 
value benefits for allocation purposes under ERISA section 4044. 
Assumptions under the asset allocation regulation are updated quarterly 
and are intended to reflect current conditions in the financial and 
annuity markets. This final rule updates the asset allocation interest 
assumptions for the first quarter (January through March) of 2017.
    The first quarter 2017 interest assumptions under the allocation 
regulation will be 1.87 percent for the first 20 years following the 
valuation date and 2.37 percent thereafter. In comparison with the 
interest assumptions in effect for the fourth 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 0.11 percent in the select rate, and a decrease of 0.30 
percent in the ultimate rate (the final rate).
    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 
of benefits under plans with valuation dates during the first quarter 
of 2017, PBGC finds that good cause exists for

[[Page 93600]]

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 4044

    Employee benefit plans, Pension insurance, Pensions.

    In consideration of the foregoing, 29 CFR part 4044 is amended as 
follows:

PART 4044--ALLOCATION OF ASSETS IN SINGLE-EMPLOYER PLANS

0
1. 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
2. In appendix B to part 4044, a new entry for January-March 2017, as 
set forth below, is added to the table.

Appendix B to Part 4044--Interest Rates Used To Value Benefits

* * * * *

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                                                                                            The values of it are:
   For valuation dates occurring in the month--    -----------------------------------------------------------------------------------------------------
                                                           it            for t =             it            for t =             it            for t =
--------------------------------------------------------------------------------------------------------------------------------------------------------
 
                                                                      * * * * * * *
January-March 2017................................          0.0187             1-20           0.0237              >20              N/A              N/A
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    Signed in Washington, DC.
Deborah Chase Murphy,
Assistant General Counsel for Regulatory Affairs, Pension Benefit 
Guaranty Corporation.
[FR Doc. 2016-30634 Filed 12-20-16; 8:45 am]
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