83 FR 46641 - 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 179 (September 14, 2018)
Federal Register Volume 83, Issue 179 (September 14, 2018)
| Page Range | 46641-46642 | |
| FR Document | 2018-19835 |
[Federal Register Volume 83, Number 179 (Friday, September 14, 2018)] [Rules and Regulations] [Pages 46641-46642] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2018-19835] ======================================================================= ----------------------------------------------------------------------- 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 2018 and interest assumptions under the asset allocation regulation for valuation dates in the fourth 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 October 1, 2018. FOR FURTHER INFORMATION CONTACT: Melissa Rifkin ([email protected]), Attorney, Regulatory Affairs Division, Pension Benefit Guaranty Corporation, 1200 K Street NW, Washington, DC 20005, 202-326-4400, ext. 6563. (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. 6563.) 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 October 2018 and updates the asset allocation interest assumptions for the fourth quarter (October through December) of 2018. The fourth quarter 2018 interest assumptions under the allocation regulation will be 2.84 percent for the first 20 years following the valuation date and 2.76 percent thereafter. In comparison with the interest assumptions in effect for the third quarter of 2018, these interest assumptions represent a decrease of 5 years in the select period (the period during which the select rate (the initial rate) applies), an increase of 0.31 percent in the select rate, and an increase of 0.12 percent in the ultimate rate (the final rate). The October 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 September 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 October 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 300 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 46642]] ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ For plans with a valuation Deferred annuities (percent) date Immediate ------------------------------------------------------------------------------- Rate set -------------------------------- annuity rate On or after Before (percent) i i i n n ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ * * * * * * * 300............................................................. 10-1-18 11-1-18 1.25 4.00 4.00 4.00 7 8 ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ 0 3. In appendix C to part 4022, Rate Set 300 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 Deferred annuities (percent) date Immediate ------------------------------------------------------------------------------- Rate set -------------------------------- annuity rate On or after Before (percent) i i i n n ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ * * * * * * * 300............................................................. 10-1-18 11-1-18 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 ``October-December 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 = -------------------------------------------------------------------------------------------------------------------------------------------------------- * * * * * * * October-December 2018................................... 0.0284 1-20 0.0276 >20 N/A N/A -------------------------------------------------------------------------------------------------------------------------------------------------------- Issued in Washington, DC. Hilary Duke, Assistant General Counsel, Pension Benefit Guaranty Corporation. [FR Doc. 2018-19835 Filed 9-13-18; 8:45 am] BILLING CODE 7709-02-P
![Federal Register / Vol. 83, No. 179 / Friday, September 14, 2018 / Rules and Regulations 46641
pay $63 for each additional area code of SUPPLEMENTARY INFORMATION: PBGC’s preceding the benefit’s placement in pay
data not initially selected. To obtain regulations on Allocation of Assets in status. In comparison with the interest
access to additional area codes of data Single-Employer Plans (29 CFR part assumptions in effect for September
during the second six months of the 4044) and Benefits Payable in 2018, these interest assumptions
annual period, each person required to Terminated Single-Employer Plans (29 represent no change in the immediate
pay the fee under paragraph (c) of this CFR part 4022) prescribe actuarial rate and no changes in i1, i2, or i3.
section must first pay $32 for each assumptions—including interest PBGC has determined that notice and
additional area code of data not initially assumptions—for valuing and paying public comment on this amendment are
selected. The payment of the additional plan benefits under terminating single- impracticable and contrary to the public
fee will permit the person to access the employer plans covered by title IV of interest. This finding is based on the
additional area codes of data for the the Employee Retirement Income need to determine and issue new
remainder of the annual period. Security Act of 1974 (ERISA). The interest assumptions promptly so that
* * * * * interest assumptions in the regulations the assumptions can reflect current
are also published on PBGC’s website market conditions as accurately as
By direction of the Commission.
(http://www.pbgc.gov). possible.
Donald S. Clark,
The interest assumptions in appendix Because of the need to provide
Secretary. B to part 4044 are used to value benefits immediate guidance for the valuation
[FR Doc. 2018–20048 Filed 9–13–18; 8:45 am] for allocation purposes under ERISA and payment of benefits under plans
BILLING CODE 6750–01–P section 4044. PBGC uses the interest with valuation dates during October
assumptions in appendix B to part 4022 2018, PBGC finds that good cause exists
to determine whether a benefit is for making the assumptions set forth in
PENSION BENEFIT GUARANTY payable as a lump sum and to determine this amendment effective less than 30
CORPORATION the amount to pay. Appendix C to part days after publication.
4022 contains interest assumptions for PBGC has determined that this action
29 CFR Parts 4022 and 4044 private-sector pension practitioners to is not a ‘‘significant regulatory action’’
refer to if they wish to use lump-sum under the criteria set forth in Executive
Allocation of Assets in Single-
interest rates determined using PBGC’s Order 12866.
Employer Plans; Benefits Payable in
historical methodology. Currently, the Because no general notice of proposed
Terminated Single-Employer Plans;
rates in appendices B and C of the rulemaking is required for this
Interest Assumptions for Valuing and
benefit payment regulation are the same. amendment, the Regulatory Flexibility
Paying Benefits
The interest assumptions are intended Act of 1980 does not apply. See 5 U.S.C.
AGENCY: Pension Benefit Guaranty to reflect current conditions in the 601(2).
Corporation. financial and annuity markets.
ACTION: Final rule. Assumptions under the asset allocation List of Subjects
regulation are updated quarterly; 29 CFR Part 4022
SUMMARY: This final rule amends the assumptions under the benefit payments
Pension Benefit Guaranty Corporation’s regulation are updated monthly. This Employee benefit plans, Pension
regulations on Benefits Payable in final rule updates the benefit payments insurance, Pensions, Reporting and
Terminated Single-Employer Plans and interest assumptions for October 2018 recordkeeping requirements.
Allocation of Assets in Single-Employer and updates the asset allocation interest 29 CFR Part 4044
Plans to prescribe interest assumptions assumptions for the fourth quarter
under the benefit payments regulation (October through December) of 2018. Employee benefit plans, Pension
for valuation dates in October 2018 and The fourth quarter 2018 interest insurance, Pensions.
interest assumptions under the asset assumptions under the allocation In consideration of the foregoing, 29
allocation regulation for valuation dates regulation will be 2.84 percent for the CFR parts 4022 and 4044 are amended
in the fourth quarter of 2018. The first 20 years following the valuation as follows:
interest assumptions are used for date and 2.76 percent thereafter. In
valuing and paying benefits under comparison with the interest PART 4022—BENEFITS PAYABLE IN
terminating single-employer plans assumptions in effect for the third TERMINATED SINGLE-EMPLOYER
covered by the pension insurance quarter of 2018, these interest PLANS
system administered by PBGC. assumptions represent a decrease of 5
DATES: Effective October 1, 2018. years in the select period (the period ■ 1. The authority citation for part 4022
FOR FURTHER INFORMATION CONTACT: during which the select rate (the initial continues to read as follows:
Melissa Rifkin (rifkin.melissa@ rate) applies), an increase of 0.31 Authority: 29 U.S.C. 1302, 1322, 1322b,
PBGC.gov), Attorney, Regulatory Affairs percent in the select rate, and an 1341(c)(3)(D), and 1344.
Division, Pension Benefit Guaranty increase of 0.12 percent in the ultimate ■ 2. In appendix B to part 4022, Rate Set
Corporation, 1200 K Street NW, rate (the final rate). 300 is added at the end of the table to
Washington, DC 20005, 202–326–4400, The October 2018 interest read as follows:
ext. 6563. (TTY users may call the assumptions under the benefit payments
Federal relay service toll free at 1–800– regulation will be 1.25 percent for the Appendix B to Part 4022—Lump Sum
877–8339 and ask to be connected to period during which a benefit is in pay Interest Rates For PBGC Payments
202–326–4400, ext. 6563.) status and 4.00 percent during any years * * * * *
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![46642 Federal Register / Vol. 83, No. 179 / Friday, September 14, 2018 / Rules and Regulations
For plans with a valuation date Deferred annuities
Immediate
Rate (percent)
annuity rate
set On or after Before (percent) i1 i2 i3 n1 n2
* * * * * * *
300 .... 10–1–18 11–1–18 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
300 is added at the end of the table to Interest Rates For Private-Sector
read as follows: Payments
* * * * *
For plans with a valuation date Deferred annuities
Immediate
Rate (percent)
annuity rate
set On or after Before (percent) i1 i2 i3 n1 n2
* * * * * * *
300 .... 10–1–18 11–1–18 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 ‘‘October–December 2018’’ is added
■ 4. The authority citation for part 4044
continues to read as follows: at the end of the table to read as follows:
The values of it are:
For valuation dates occurring in the
month— it for t = it for t = it for t =
* * * * * * *
October–December 2018 ......................... 0.0284 1–20 0.0276 >20 N/A N/A
Issued in Washington, DC. DATES: This rule is effective October 15, proposed rule to amend its regulation
Hilary Duke, 2018. on Mergers and Transfers Between
Assistant General Counsel, Pension Benefit FOR FURTHER INFORMATION CONTACT: Multiemployer Plans (81 FR 36229). In
Guaranty Corporation. Theresa B. Anderson this final rule, PBGC adopts its
[FR Doc. 2018–19835 Filed 9–13–18; 8:45 am] (anderson.theresa@pbgc.gov), Deputy proposed changes implementing MPRA,
BILLING CODE 7709–02–P Assistant General Counsel, Office of the with some modifications in response to
General Counsel, Pension Benefit public comments, and some of its
Guaranty Corporation, 1200 K Street proposed changes updating and
PENSION BENEFIT GUARANTY NW, Washington DC 20005–4026; 202– reorganizing the existing regulation. To
CORPORATION 326–4400, ext. 6353. (TTY users may allow more consideration of the
call the Federal relay service toll-free at concerns raised by the public
29 CFR Part 4231 800–877–8339 and ask to be connected comments, PBGC is not adopting its
to 202–326–4400, extension 6353.) proposed changes to provisions of the
RIN 1212–AB31 existing regulation related to plan
SUPPLEMENTARY INFORMATION:
solvency.
Mergers and Transfers Between
Multiemployer Plans Executive Summary PBGC’s legal authority for this action
is based on section 4002(b)(3) of ERISA,
Purpose of the Regulatory Action
AGENCY: Pension Benefit Guaranty which authorizes PBGC to issue
Corporation. This final rule is needed to implement regulations to carry out the purposes of
ACTION: Final rule. statutory changes under the title IV of ERISA, and section 4231 of
Multiemployer Pension Reform Act of ERISA, which sets forth the statutory
SUMMARY: PBGC is issuing a final rule 2014 (MPRA) affecting mergers of requirements for mergers and transfers
amending its regulation on Mergers and multiemployer plans under title IV of between multiemployer plans.
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Transfers Between Multiemployer Plans the Employee Retirement Income
Major Provisions of the Regulatory
to implement procedures and Security Act of 1974 (ERISA) and to
Action
information requirements for a request update PBGC’s existing regulatory
for a facilitated merger. This final rule requirements applicable to mergers and This final rule makes one major and
also reorganizes and updates provisions transfers between multiemployer plans. numerous minor changes to PBGC’s
in the existing regulation. On June 6, 2016, PBGC published a regulation on Mergers and Transfers
VerDate Sep<11>2014 16:08 Sep 13, 2018 Jkt 244001 PO 00000 Frm 00016 Fmt 4700 Sfmt 4700 E:\FR\FM\14SER1.SGM 14SER1](https://thefederalregister.org/doc/83_FR_46820/page/2.svg)
Document Created: 2018-09-14 03:03:37
Document Modified: 2018-09-14 03:03:37
| 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, 2018. | |
| Contact | Melissa Rifkin ([email protected]), Attorney, Regulatory Affairs Division, Pension Benefit Guaranty Corporation, 1200 K Street NW, Washington, DC 20005, 202-326-4400, ext. 6563. (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. 6563.) | |
| FR Citation | 83 FR 46641 | |
| 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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