[Federal Register: September 15, 1998 (Volume 63, Number 178)] [Notices] [Page 49371-49372] From the Federal Register Online via GPO Access [wais.access.gpo.gov] [DOCID:fr15se98-112] ======================================================================= ----------------------------------------------------------------------- PENSION BENEFIT GUARANTY CORPORATION Interest Assumption for Determining Variable-Rate Premium; Interest Assumptions for Multiemployer Plan Valuations Following Mass Withdrawal AGENCY: Pension Benefit Guaranty Corporation. ACTION: Notice of interest rates and assumptions. ----------------------------------------------------------------------- SUMMARY: This notice informs the public of the interest rates and assumptions to be used under certain Pension Benefit Guaranty Corporation regulations. These rates and assumptions are published elsewhere (or are derivable from rates published elsewhere), but are collected [[Page 49372]] and published in this notice for the convenience of the public. Interest rates are also published on the PBGC's web site (http:// www.pbgc.gov). DATES: The interest rate for determining the variable-rate premium under part 4006 applies to premium payment years beginning in September 1998. The interest assumptions for performing multiemployer plan valuations following mass withdrawal under part 4281 apply to valuation dates occurring in October 1998. FOR FURTHER INFORMATION CONTACT: Harold J. Ashner, Assistant General Counsel, Office of the General Counsel, Pension Benefit Guaranty Corporation, 1200 K Street, NW., Washington, DC 20005, 202-326-4024. (For TTY/TDD users, call the Federal relay service toll-free at 1-800- 877-8339 and ask to be connected to 202-326-4024.) SUPPLEMENTARY INFORMATION: Variable-Rate Premiums Section 4006(a)(3)(E)(iii)(II) of the Employee Retirement Income Security Act of 1974 (ERISA) and Sec. 4006.4(b)(1) of the PBGC's regulation on Premium Rates (29 CFR part 4006) prescribe use of an assumed interest rate in determining a single-employer plan's variable- rate premium. The rate is the ``applicable percentage'' (described in the statute and the regulation) of the annual yield on 30-year Treasury securities for the month preceding the beginning of the plan year for which premiums are being paid (the ``premium payment year''). The yield figure is reported in Federal Reserve Statistical Releases G.13 and H.15. For plan years beginning before July 1, 1997, the applicable percentage of the 30-year Treasury yield was 80 percent. The Retirement Protection Act of 1994 (RPA) amended ERISA section 4006(a)(3)(E)(iii)(II) to change the applicable percentage to 85 percent, effective for plan years beginning on or after July 1, 1997. (The amendment also provides for a further increase in the applicable percentage--to 100 percent--when the Internal Revenue Service adopts new mortality tables for determining current liability.) The assumed interest rate to be used in determining variable-rate premiums for premium payment years beginning in September 1998 is 4.71 percent (i.e., 85 percent of the 5.54 percent yield figure for August 1998). (Under section 774(c) of the RPA, the amendment to the applicable percentage was deferred for certain regulated public utility (RPU) plans for as long as six months. The applicable percentage for RPU plans has therefore remained 80 percent for plan years beginning before January 1, 1998. For ``partial'' RPU plans, the assumed interest rates to be used in determining variable-rate premiums can be computed by applying the rules in Sec. 4006.5(g) of the premium rates regulation. The PBGC's 1997 premium payment instruction booklet also describes these rules and provides a worksheet for computing the assumed rate.) The following table lists the assumed interest rates to be used in determining variable-rate premiums for premium payment years beginning between October 1997 and September 1998. The rates for October through December 1997 in the table (which reflect an applicable percentage of 85 percent) apply only to non-RPU plans. However, the rates for months after December 1997 apply to RPU (and ``partial'' RPU) plans as well as to non-RPU plans. ------------------------------------------------------------------------ The assumed For premium payment years beginning in-- interest rate is-- ------------------------------------------------------------------------ October 1997.............................................. 5.53 November 1997............................................. 5.38 December 1997............................................. 5.19 January 1998.............................................. 5.09 February 1998............................................. 4.94 March 1998................................................ 5.01 April 1998................................................ 5.06 May 1998.................................................. 5.03 June 1998................................................. 5.04 July 1998................................................. 4.85 August 1998............................................... 4.83 September 1998............................................ 4.71 ------------------------------------------------------------------------ Multiemployer Plan Valuations Following Mass Withdrawal The PBGC's regulation on Duties of Plan Sponsor Following Mass Withdrawal (29 CFR part 4281) prescribes the use of interest assumptions under the PBGC's regulation on Allocation of Assets in Single-employer Plans (29 CFR part 4044). The interest assumptions applicable to valuation dates in October 1998 under part 4044 are contained in an amendment to part 4044 published elsewhere in today's Federal Register. Tables showing the assumptions applicable to prior periods are codified in appendix B to 29 CFR part 4044. Issued in Washington, DC, on this 3rd day of September 1998. David M. Strauss, Acting Executive Director, Pension Benefit Guaranty Corporation. [FR Doc. 98-24634 Filed 9-14-98; 8:45 am] BILLING CODE 7708-01-P