83 FR 27898 - 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 83, Issue 116 (June 15, 2018)
Federal Register Volume 83, Issue 116 (June 15, 2018)
| Page Range | 27898-27899 | |
| FR Document | 2018-12549 |
[Federal Register Volume 83, Number 116 (Friday, June 15, 2018)] [Rules and Regulations] [Pages 27898-27899] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2018-12549] ======================================================================= ----------------------------------------------------------------------- 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 2018 and interest assumptions under the asset allocation regulation for valuation dates in the third quarter of 2018. 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, 2018. FOR FURTHER INFORMATION CONTACT: Hilary Duke (duke.hilary@PBGC.gov), Assistant General Counsel for Regulatory Affairs, Pension Benefit Guaranty Corporation, 1200 K Street NW, Washington, DC 20005, 202-326- 4400, ext. 3839. (TTY users may call the Federal relay service toll free at 1-800-877-8339 and ask to be connected to 202-326-4400, ext. 3839.) 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 (ERISA). The interest assumptions in the regulations are also published on PBGC's website (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 2018 and updates the asset allocation interest assumptions for the third quarter (July through September) of 2018. The third quarter 2018 interest assumptions under the allocation regulation will be 2.53 percent for the first 25 years following the valuation date and 2.64 percent thereafter. In comparison with the interest assumptions in effect for the second quarter of 2018, these interest assumptions represent an increase of 5 years in the select period (the period during which the select rate (the initial rate) applies), an increase of 0.26 percent in the select rate, and an increase of 0.05 percent in the ultimate rate (the final rate). The July 2018 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 June 2018, these interest assumptions represent no change in the immediate rate and no changes in i1, i2, or i3. 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 2018, 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 297 is added at the end of the table to read as follows: Appendix B to Part 4022--Lump Sum Interest Rates for PBGC Payments * * * * * [[Page 27899]] -------------------------------------------------------------------------------------------------------------------------------------------------------- For plans with a valuation date Immediate Deferred annuities (percent) Rate set ---------------------------------- annuity rate ------------------------------------------------------------------------------------ On or after Before (percent) i i i n n -------------------------------------------------------------------------------------------------------------------------------------------------------- * * * * * * * 297 7-1-18 8-1-18 1.25 4.00 4.00 4.00 7 8 -------------------------------------------------------------------------------------------------------------------------------------------------------- 0 3. In appendix C to part 4022, Rate Set 297 is added at the end of the table to read as follows: 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) i i i n n -------------------------------------------------------------------------------------------------------------------------------------------------------- * * * * * * * 297 7-1-18 8-1-18 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, an entry for ``July-September 2018'' is added at the end of the table to read as follows: Appendix B to Part 4044--Interest Rates Used To Value Benefits * * * * * -------------------------------------------------------------------------------------------------------------------------------------------------------- The values of i are: For valuation dates occurring in the month-- ----------------------------------------------------------------------------------------------------- i for t = i for t = i for t = -------------------------------------------------------------------------------------------------------------------------------------------------------- * * * * * * * July-September 2018............................... 0.0253 1-25 0.0264 >25 N/A N/A -------------------------------------------------------------------------------------------------------------------------------------------------------- Issued in Washington, DC. Hilary Duke, Assistant General Counsel, Pension Benefit Guaranty Corporation. [FR Doc. 2018-12549 Filed 6-14-18; 8:45 am] BILLING CODE 7709-02-P
![27898 Federal Register / Vol. 83, No. 116 / Friday, June 15, 2018 / Rules and Regulations
(9) Performance data must support the NW, Washington, DC 20005, 202–326– during which a benefit is in pay status
shelf life of the device by demonstrating 4400, ext. 3839. (TTY users may call the and 4.00 percent during any years
continued sterility, package integrity, Federal relay service toll free at 1–800– preceding the benefit’s placement in pay
and device functionality over the 877–8339 and ask to be connected to status. In comparison with the interest
identified shelf life. 202–326–4400, ext. 3839.) assumptions in effect for June 2018,
(10) Performance data must validate SUPPLEMENTARY INFORMATION: PBGC’s these interest assumptions represent no
the instructions for reprocessing and regulations on Allocation of Assets in change in the immediate rate and no
reliability of reusable components. Single-Employer Plans (29 CFR part changes in i1, i2, or i3.
(11) Labeling must include the 4044) and Benefits Payable in PBGC has determined that notice and
following: Terminated Single-Employer Plans (29 public comment on this amendment are
(i) A section that summarizes the CFR part 4022) prescribe actuarial impracticable and contrary to the public
clinical testing results, including the assumptions—including interest interest. This finding is based on the
adverse event profile and improvement assumptions—for valuing and paying need to determine and issue new
in LUTS; plan benefits under terminating single- interest assumptions promptly so that
(ii) A shelf life for single use employer plans covered by title IV of the assumptions can reflect current
components; the Employee Retirement Income market conditions as accurately as
(iii) A use life for reusable Security Act of 1974 (ERISA). The possible.
components; and interest assumptions in the regulations Because of the need to provide
(iv) Reprocessing instructions for are also published on PBGC’s website immediate guidance for the valuation
reusable components. (http://www.pbgc.gov). and payment of benefits under plans
Dated: June 8, 2018.
The interest assumptions in appendix with valuation dates during July 2018,
B to part 4044 are used to value benefits PBGC finds that good cause exists for
Leslie Kux,
for allocation purposes under ERISA making the assumptions set forth in this
Associate Commissioner for Policy. section 4044. PBGC uses the interest
[FR Doc. 2018–12829 Filed 6–14–18; 8:45 am]
amendment effective less than 30 days
assumptions in appendix B to part 4022 after publication.
BILLING CODE 4164–01–P to determine whether a benefit is
PBGC has determined that this action
payable as a lump sum and to determine
is not a ‘‘significant regulatory action’’
the amount to pay. Appendix C to part
under the criteria set forth in Executive
PENSION BENEFIT GUARANTY 4022 contains interest assumptions for
Order 12866.
CORPORATION private-sector pension practitioners to
refer to if they wish to use lump-sum Because no general notice of proposed
29 CFR Parts 4022 and 4044 interest rates determined using PBGC’s rulemaking is required for this
historical methodology. Currently, the amendment, the Regulatory Flexibility
Allocation of Assets in Single- rates in appendices B and C of the Act of 1980 does not apply. See 5 U.S.C.
Employer Plans; Benefits Payable in benefit payment regulation are the same. 601(2).
Terminated Single-Employer Plans; The interest assumptions are intended List of Subjects
Interest Assumptions for Valuing and to reflect current conditions in the
Paying Benefits financial and annuity markets. 29 CFR Part 4022
AGENCY: Pension Benefit Guaranty Assumptions under the asset allocation Employee benefit plans, Pension
Corporation. regulation are updated quarterly; insurance, Pensions, Reporting and
assumptions under the benefit payments recordkeeping requirements.
ACTION: Final rule.
regulation are updated monthly. This
final rule updates the benefit payments 29 CFR Part 4044
SUMMARY: This final rule amends the
Pension Benefit Guaranty Corporation’s interest assumptions for July 2018 and Employee benefit plans, Pension
regulations on Benefits Payable in updates the asset allocation interest insurance, Pensions.
Terminated Single-Employer Plans and assumptions for the third quarter (July
through September) of 2018. In consideration of the foregoing, 29
Allocation of Assets in Single-Employer CFR parts 4022 and 4044 are amended
Plans to prescribe interest assumptions The third quarter 2018 interest
assumptions under the allocation as follows:
under the benefit payments regulation
regulation will be 2.53 percent for the
for valuation dates in July 2018 and PART 4022—BENEFITS PAYABLE IN
first 25 years following the valuation
interest assumptions under the asset TERMINATED SINGLE–EMPLOYER
date and 2.64 percent thereafter. In
allocation regulation for valuation dates PLANS
comparison with the interest
in the third quarter of 2018. The interest
assumptions in effect for the second
assumptions are used for valuing and ■ 1. The authority citation for part 4022
quarter of 2018, these interest
paying benefits under terminating continues to read as follows:
assumptions represent an increase of 5
single-employer plans covered by the Authority: 29 U.S.C. 1302, 1322, 1322b,
years in the select period (the period
pension insurance system administered 1341(c)(3)(D), and 1344.
during which the select rate (the initial
by PBGC.
rate) applies), an increase of 0.26 ■ 2. In appendix B to part 4022, Rate Set
DATES: Effective July 1, 2018. percent in the select rate, and an 297 is added at the end of the table to
FOR FURTHER INFORMATION CONTACT: increase of 0.05 percent in the ultimate read as follows:
Hilary Duke (duke.hilary@PBGC.gov), rate (the final rate).
sradovich on DSK3GMQ082PROD with RULES
Assistant General Counsel for The July 2018 interest assumptions Appendix B to Part 4022—Lump Sum
Regulatory Affairs, Pension Benefit under the benefit payments regulation Interest Rates for PBGC Payments
Guaranty Corporation, 1200 K Street will be 1.25 percent for the period * * * * *
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![Federal Register / Vol. 83, No. 116 / Friday, June 15, 2018 / Rules and Regulations 27899
For plans with a valuation Deferred annuities
Immediate
date (percent)
Rate set annuity rate
(percent)
On or after Before i1 i2 i3 n1 n2
* * * * * * *
297 7–1–18 8–1–18 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
297 is added at the end of the table to Interest Rates for Private-Sector
read as follows: 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
* * * * * * *
297 7–1–18 8–1–18 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, an entry * * * * *
for ‘‘July–September 2018’’ is added at
■ 4. The authority citation for part 4044
continues to read as follows: the end of the table to read as follows:
The values of it are:
For valuation dates oc-
curring in the month— it for t = it for t = it for t =
* * * * * * *
July–September 2018 .... 0.0253 1–25 0.0264 >25 N/A N/A
Issued in Washington, DC. the safety of life on these navigable II. Background Information and
Hilary Duke, waters in Hopewell, VA, during a Regulatory History
Assistant General Counsel, Pension Benefit fireworks display on June 30, 2018. This On March 27, 2018, the Hopewell
Guaranty Corporation. rule prohibits persons and vessels from Recreation and Parks Department
[FR Doc. 2018–12549 Filed 6–14–18; 8:45 am] being in the safety zone unless notified the Coast Guard that it will be
BILLING CODE 7709–02–P authorized by the Captain of the Port conducting a fireworks display from
Hampton Roads or a designated approximately 9:30 to 9:45 p.m. on June
representative. 30, 2018, to serve as the city of
DEPARTMENT OF HOMELAND Hopewell’s Fourth of July celebration.
SECURITY DATES: This rule is effective from 9 p.m. The fireworks are to be launched from
to 11 p.m. on June 30, 2018. a barge in the Appomattox River near
Coast Guard FOR FURTHER INFORMATION CONTACT: If City Point in Hopewell, VA. In
you have questions on this rule, call or response, on May 31, 2018, the Coast
33 CFR Part 165 email LCDR Barbara Wilk, Waterways Guard published a notice of proposed
[Docket Number USCG–2018–0330] Management Division Chief, Sector rulemaking (NPRM) titled Safety Zone;
Hampton Roads, U.S. Coast Guard; Appomattox River, Hopewell, VA (83
RIN 1625–AA00 FR 24950). There we stated why we
telephone 757–668–5580, email
HamptonRoadsWaterways@uscg.mil. issued the NPRM, and invited
Safety Zone; Appomattox River, comments on our proposed regulatory
Hopewell, VA SUPPLEMENTARY INFORMATION: action related to this fireworks display.
AGENCY: Coast Guard, DHS. During the comment period that ended
I. Table of Abbreviations June 7, 2018, we received no comments.
ACTION: Temporary final rule.
sradovich on DSK3GMQ082PROD with RULES
CFR Code of Federal Regulations Under 5 U.S.C. 553(d)(3), the Coast
SUMMARY: The Coast Guard is COTP Captain of the Port Guard finds that good cause exists for
establishing a temporary safety zone for DHS Department of Homeland Security making this rule effective less than 30
a marine event on the navigable waters FR Federal Register days after publication in the Federal
of the Appomattox River at confluence NPRM Notice of proposed rulemaking Register. Delaying the effective date of
with the James River in Hopewell, VA. § Section this rule would be impracticable
This action is necessary to provide for U.S.C. United States Code because immediate action is needed to
VerDate Sep<11>2014 15:57 Jun 14, 2018 Jkt 244001 PO 00000 Frm 00011 Fmt 4700 Sfmt 4700 E:\FR\FM\15JNR1.SGM 15JNR1](https://thefederalregister.org/doc/83_FR_28014/page/2.svg)
Document Created: 2018-11-02 12:00:52
Document Modified: 2018-11-02 12:00:52
| 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, 2018. | |
| Contact | Hilary Duke ([email protected]), Assistant General Counsel for Regulatory Affairs, Pension Benefit Guaranty Corporation, 1200 K Street NW, Washington, DC 20005, 202-326- 4400, ext. 3839. (TTY users may call the Federal relay service toll free at 1-800-877-8339 and ask to be connected to 202-326-4400, ext. 3839.) | |
| FR Citation | 83 FR 27898 | |
| 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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