82 FR 6243 - Benefits Payable in Terminated Single-Employer Plans; Interest Assumptions for Paying Benefits
PENSION BENEFIT GUARANTY CORPORATION Federal Register Volume 82, Issue 12 (January 19, 2017)
Federal Register Volume 82, Issue 12 (January 19, 2017)
| Page Range | 6243-6244 | |
| FR Document | 2017-00461 |
[Federal Register Volume 82, Number 12 (Thursday, January 19, 2017)] [Rules and Regulations] [Pages 6243-6244] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2017-00461] ======================================================================= ----------------------------------------------------------------------- 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. ----------------------------------------------------------------------- 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 February 2017. The interest assumptions are used for paying benefits under terminating single-employer plans covered by the pension insurance system administered by PBGC. DATES: Effective February 1, 2017. FOR FURTHER INFORMATION CONTACT: Deborah C. Murphy ([email protected]), Assistant General Counsel for Regulatory Affairs, 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 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 February 2017.\1\ --------------------------------------------------------------------------- \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. --------------------------------------------------------------------------- The February 2017 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 January 2017, 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 payment of benefits under plans with valuation dates during February 2017, 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 280, 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 date Immediate Deferred annuities (percent) Rate set ---------------------------------- annuity rate ------------------------------------------------------------------------------------ On or after Before (percent) i i i n n -------------------------------------------------------------------------------------------------------------------------------------------------------- * * * * * * * 280 2-1-17 3-1-17 1.25 4.00 4.00 4.00 7 8 -------------------------------------------------------------------------------------------------------------------------------------------------------- 0 3. In appendix C to part 4022, Rate Set 280, as set forth below, is added to the table. Appendix C to Part 4022--Lump Sum Interest Rates for Private-Sector Payments * * * * * [[Page 6244]] -------------------------------------------------------------------------------------------------------------------------------------------------------- For plans with a valuation date Immediate Deferred annuities (percent) Rate set ---------------------------------- annuity rate ------------------------------------------------------------------------------------ On or after Before (percent) i i i n n -------------------------------------------------------------------------------------------------------------------------------------------------------- * * * * * * * 280 2-1-17 3-1-17 1.25 4.00 4.00 4.00 7 8 -------------------------------------------------------------------------------------------------------------------------------------------------------- Issued in Washington, DC. Deborah Chase Murphy, Assistant General Counsel for Regulatory Affairs, Pension Benefit Guaranty Corporation. [FR Doc. 2017-00461 Filed 1-18-17; 8:45 am] BILLING CODE 7709-02-P
![Federal Register / Vol. 82, No. 12 / Thursday, January 19, 2017 / Rules and Regulations 6243
see § 1.1312–7 as contained in 26 CFR 1–800–877–8339 and ask to be interest. This finding is based on the
part 1 revised as of April 1, 2016. connected to 202–326–4400 ext. 3451.) need to determine and issue new
SUPPLEMENTARY INFORMATION: PBGC’s interest assumptions promptly so that
John Dalrymple,
regulation on Benefits Payable in the assumptions can reflect current
Deputy Commissioner for Services and
Enforcement. Terminated Single-Employer Plans (29 market conditions as accurately as
CFR part 4022) prescribes actuarial possible.
Approved: November 11, 2016.
assumptions—including interest Because of the need to provide
Mark J. Mazur,
assumptions—for paying plan benefits immediate guidance for the payment of
Assistant Secretary of the Treasury (Tax
under terminating single-employer benefits under plans with valuation
Policy).
plans covered by title IV of the dates during February 2017, PBGC finds
[FR Doc. 2017–01365 Filed 1–18–17; 8:45 am]
Employee Retirement Income Security that good cause exists for making the
BILLING CODE 4830–01–P
Act of 1974. The interest assumptions in assumptions set forth in this
the regulation are also published on amendment effective less than 30 days
PBGC’s Web site (http://www.pbgc.gov). after publication.
PENSION BENEFIT GUARANTY PBGC uses the interest assumptions in PBGC has determined that this action
CORPORATION Appendix B to Part 4022 to determine is not a ‘‘significant regulatory action’’
whether a benefit is payable as a lump under the criteria set forth in Executive
29 CFR Part 4022
sum and to determine the amount to Order 12866.
Benefits Payable in Terminated Single- pay. Appendix C to Part 4022 contains Because no general notice of proposed
Employer Plans; Interest Assumptions interest assumptions for private-sector rulemaking is required for this
for Paying Benefits pension practitioners to refer to if they amendment, the Regulatory Flexibility
wish to use lump-sum interest rates Act of 1980 does not apply. See 5 U.S.C.
AGENCY: Pension Benefit Guaranty determined using PBGC’s historical 601(2).
Corporation. methodology. Currently, the rates in
ACTION: Final rule. Appendices B and C of the benefit List of Subjects in 29 CFR Part 4022
payment regulation are the same. Employee benefit plans, Pension
SUMMARY: This final rule amends the The interest assumptions are intended
Pension Benefit Guaranty Corporation’s insurance, Pensions, Reporting and
to reflect current conditions in the recordkeeping requirements.
regulation on Benefits Payable in
financial and annuity markets.
Terminated Single-Employer Plans to In consideration of the foregoing, 29
Assumptions under the benefit
prescribe interest assumptions under CFR part 4022 is amended as follows:
payments regulation are updated
the regulation for valuation dates in
monthly. This final rule updates the PART 4022—BENEFITS PAYABLE IN
February 2017. The interest
benefit payments interest assumptions TERMINATED SINGLE-EMPLOYER
assumptions are used for paying
for February 2017.1 PLANS
benefits under terminating single-
The February 2017 interest
employer plans covered by the pension
assumptions under the benefit payments ■ 1. The authority citation for part 4022
insurance system administered by
regulation will be 1.25 percent for the continues to read as follows:
PBGC.
period during which a benefit is in pay
DATES: Effective February 1, 2017. status and 4.00 percent during any years Authority: 29 U.S.C. 1302, 1322, 1322b,
1341(c)(3)(D), and 1344.
FOR FURTHER INFORMATION CONTACT: preceding the benefit’s placement in pay
Deborah C. Murphy (Murphy.Deborah@ status. In comparison with the interest ■ 2. In appendix B to part 4022, Rate Set
pbgc.gov), Assistant General Counsel for assumptions in effect for January 2017, 280, as set forth below, is added to the
Regulatory Affairs, Pension Benefit these interest assumptions are table.
Guaranty Corporation, 1200 K Street unchanged.
NW., Washington, DC 20005, 202–326– PBGC has determined that notice and Appendix B to Part 4022—Lump Sum
4400 ext. 3451. (TTY/TDD users may public comment on this amendment are Interest Rates For PBGC Payments
call the Federal relay service toll-free at impracticable and contrary to the public * * * * *
For plans with a valuation Deferred annuities
Immediate
date (percent)
Rate set annuity rate
(percent)
On or after Before i1 i2 i3 n1 n2
* * * * * * *
280 2–1–17 3–1–17 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
280, as set forth below, is added to the Interest Rates for Private-Sector
table. Payments
asabaliauskas on DSK3SPTVN1PROD with RULES
* * * * *
1 Appendix B to PBGC’s regulation on Allocation
benefits under terminating covered single-employer ERISA section 4044. Those assumptions are
of Assets in Single-Employer Plans (29 CFR part plans for purposes of allocation of assets under updated quarterly.
4044) prescribes interest assumptions for valuing
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![6244 Federal Register / Vol. 82, No. 12 / Thursday, January 19, 2017 / 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
* * * * * * *
280 2–1–17 3–1–17 1.25 4.00 4.00 4.00 7 8
Issued in Washington, DC. Technical information: Gregory Till, II. Section-by-Section Analysis
Deborah Chase Murphy, myRA Bureau Director, at (202) 622–
Subpart A—General Information
Assistant General Counsel for Regulatory 6970 or Gregory.Till@treasury.gov.
Affairs, Pension Benefit Guaranty Legal information: Elizabeth Spears, Section 347.0 Offering of securities.
Corporation. Senior Counsel, at (304) 480–8647 or This section is amended to offer
[FR Doc. 2017–00461 Filed 1–18–17; 8:45 am] Lisa.Spears@fiscal.treasury.gov. retirement savings bonds to Auto-IRA
BILLING CODE 7709–02–P SUPPLEMENTARY INFORMATION:
custodians for certain state retirement
savings programs.
I. Background Section 347.1 Applicability. This
Approximately one third of private- section is amended to include the Auto-
DEPARTMENT OF THE TREASURY
sector employees in the United States IRA custodians for state retirement
Fiscal Service savings programs under this part.
lack access to a retirement savings plan
Section 347.2 Official agencies. This
through their employers.1 To fill this
31 CFR Part 347 section clarifies that Fiscal Service is
gap, several states are establishing or responsible for issuing retirement
RIN 1530–AA13 considering establishing programs that savings bonds to the Auto-IRA
will encourage employees to save for custodians and that states are
Regulations Governing Retirement their retirement, including through responsible for administering their own
Savings Bonds individual retirement accounts into Auto-IRA retirement savings programs.
which employees are automatically Section 347.3 Definitions. Several
AGENCY: Bureau of the Fiscal Service, enrolled and through other approaches
Fiscal Service, Treasury. new definitions, including ‘‘Auto-IRA,’’
(collectively referred to here as Auto- ‘‘state Auto-IRA program,’’ ‘‘IRA,’’
ACTION: Final rule. IRAs, whether or not they use automatic ‘‘Custodian,’’ ‘‘State,’’ and ‘‘Auto-IRA
SUMMARY: Currently, the Bureau of the enrollment).2 Under an Auto-IRA custodian’’ have been added for ease of
Fiscal Service (Fiscal Service) of the program, employee contributions are reference in Subpart C—Auto-IRA
United States Department of the deposited into an IRA and invested in Programs and minor changes have been
Treasury (Treasury), issues accordance with the design of the Auto- made to some existing definitions.
nonmarketable, electronic retirement IRA program and the wishes of the
participant. Generally, it is expected Subpart B—Treasury’s Retirement
savings bonds to an individual Savings Program
retirement account (IRA) custodian that an Auto-IRA program will offer a
designated by Fiscal Service to act as a safe and low-cost investment option as Miscellaneous changes have been
custodian for Roth IRAs under an alternative to a risk-bearing made to the sections pertaining to
Treasury’s myRA® program. In this diversified investment, such as a target retirement savings bonds issued to the
Final Rule, Treasury offers date fund. In order to assist states in custodian of Treasury’s retirement
nonmarketable, electronic retirement offering savers the option of a principal- savings program, myRA®, which are
savings bonds for certain retirement protected investment, Fiscal Service held in participants’ Roth IRAs. These
savings programs established by states will offer retirement savings bonds to changes, which were made to
or certain of their political subdivisions state Auto-IRA programs. Fiscal Service accommodate revised definitions and
(states). The bonds will be issued to a reserves the right, however, to decline to other minor or technical revisions, do
trustee or custodian (custodian) of a issue retirement savings bonds to state not affect the terms of these bonds. See,
Roth IRA or traditional IRA designated Auto-IRA programs on a case-by-case e.g., §§ 347.10 through 347.16.
by a state under its retirement savings basis, based on considerations such as Subpart C—Auto-IRA Programs
program (whether or not the program the structure and reasonableness of
associated fees, plans to control fees and Section 347.30 Plan requirements
provides for automatic enrollment). for State Auto-IRA programs.
Interest will be earned at a rate available expenses, whether participants have
reasonable access to their funds, and Subsection (a) of this new section
to federal employees invested in the specifies that retirement savings bonds
Government Securities Investment Fund oversight of providers designated to
operate state Auto-IRA programs. will be issued to Auto-IRA custodians
(G Fund) of the federal Thrift Savings for certain state Auto-IRA programs, and
Plan. that no other registrations under
1 National Compensation Survey, Bureau of Labor
This offering does not affect the terms Subpart C are permitted. As defined in
Statistics (July 2016), Employee Benefits in the
of retirement savings bonds issued to United States—March 2016 (http://www.bls.gov/ § 347.3, an Auto-IRA custodian is ‘‘an
the custodian of Treasury’s retirement
asabaliauskas on DSK3SPTVN1PROD with RULES
news.release/pdf/ebs2.pdf). These data show that 66 entity designated by a state (including,
savings program, myRA®, which are percent of 114 million private-sector workers have
for the purpose of these regulations,
held in participants’ Roth IRAs. More access to a retirement plan through their employers.
By extension, approximately 34 percent of the 114 certain political subdivisions of states)
information on myRA® is available at million private-sector workers (39 million) do not to act as the trustee or custodian for
www.myra.gov. have access to a retirement plan through work. Auto-IRAs, in the form of Roth IRAs or
2 The Department of Labor has published
DATES: This Final Rule is effective traditional IRAs, for or opened on behalf
regulations relating to state payroll deduction
January 19, 2017. savings programs. 81 FR 59464 (Aug. 30, 2016) and of participants in a state Auto-IRA
FOR FURTHER INFORMATION CONTACT: 81 FR 92639 (Dec. 20, 2016). program.’’ Subsection (b) lists topics
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Document Created: 2018-02-01 15:15:12
Document Modified: 2018-02-01 15:15:12
| 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 February 1, 2017. | |
| Contact | Deborah C. Murphy ([email protected]), Assistant General Counsel for Regulatory Affairs, 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.) | |
| FR Citation | 82 FR 6243 | |
| CFR Associated | Employee Benefit Plans; Pension Insurance; Pensions and Reporting and Recordkeeping Requirements |
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