Benefits Payable in Terminated Single-Employer Plans; Interest Assumptions for Valuing and Paying Benefits, 49407-49408 [2010-20000]
Download as PDF
<![CDATA[
erowe on DSK5CLS3C1PROD with RULES
Federal Register / Vol. 75, No. 156 / Friday, August 13, 2010 / Rules and Regulations
deductions on its debt instrument are subject
to deferral under section 108(i)(2)(A).
However, because only a portion of the
proceeds from P’s debt instrument are used
by S to reacquire its applicable debt
instrument, only a portion of P’s total OID
deductions will be deferred under section
108(i)(2)(A). See section 108(i)(2)(B).
Accordingly, a maximum of $17,500 ($40,000
× $70,000/$160,000) of P’s $40,000 total OID
deductions is subject to deferral under
section 108(i)(2)(A). Under paragraph (b) of
this section, the amount of P’s deferred OID
deduction each taxable year under section
108(i)(2)(A) is equal to the product of the
amount of OID that accrues in the taxable
year under section 1272 for the debt
instrument and a fraction ($70,000/
$160,000). As a result, P’s deferred OID
deductions are the following amounts:
$4,015.99 for 2010 ($ 9,179.40 × $70,000/
$160,000); $4,246.39 for 2011 ($9,706.04 ×
$70,000/$160,000); $4,490.01 for 2012
($10,262.88 × $70,000/$160,000); and
$4,747.61 for 2013 ($10,851.68 × $70,000/
$160,000).
Example 2. (i) Facts. The facts are the same
as in Example 1, except that S makes a
section 108(i) election for only $10,000 of the
$30,000 of COD income.
(ii) Analysis. The maximum amount of P’s
deferred OID deductions under section
108(i)(2)(A) is $10,000 rather than $17,500
because S made a section 108(i) election for
only $10,000 of the $30,000 of COD income.
Under section 108(i)(2)(A), because the
amount of OID that accrues prior to 2014
attributable to the portion of the debt
instrument issued to indirectly reacquire S’s
applicable debt instrument under paragraph
(b) of this section ($17,500) exceeds the
amount of deferred COD income under
section 108(i) ($10,000), P’s deferred OID
deductions are the following amounts:
$4,015.99 for 2010; $4,246.39 for 2011;
$1,737.62 for 2012; and $0 for 2013.
Example 3. (i) Facts. The facts are the same
as in Example 1, except that P pays $200,000
in cash to the lenders/holders on December
31, 2012, to retire the debt instrument. P did
not directly or indirectly obtain the funds to
retire the debt instrument from the issuance
of another debt instrument with OID.
(ii) Analysis. Under paragraph (c)(1) of this
section, the retirement of P’s debt instrument
is not an acceleration event for the deferred
OID deductions of $4,015.99 for 2010,
$4,246.39 for 2011, and $4,490.01 for 2012.
Except as provided in § 1.108(i)–1T(b)(4),
these amounts will be taken into account
during the inclusion period. P, however, paid
a repurchase premium of $10,851.68 in 2012
($200,000 minus the adjusted issue price of
$189,148.32) to retire the debt instrument. If
otherwise allowable, P may deduct this
amount in 2012 under § 1.163–7(c).
(e) Effective/applicability dates. For
effective/applicability dates, see
§ 1.108(i)–0T(b).
(f) Expiration date. This section
expires August 9, 2013.
VerDate Mar<15>2010
15:00 Aug 12, 2010
Jkt 220001
49407
NW., Washington, DC 20005, 202–326–
4024. (TTY/TDD users may call the
Federal relay service toll-free at 1–800–
877–8339 and ask to be connected to
■ Par. 5.The authority citation for part
202–326–4024.)
602 continues to read as follows:
SUPPLEMENTARY INFORMATION: PBGC’s
regulations prescribe actuarial
Authority: 26 U.S.C. 7805.
assumptions—including interest
■ Par. 6. In § 602.101, paragraph (b) is
assumptions—for valuing and paying
amended by adding the following entry
plan benefits of terminating singlein numerical order to the table to read
employer plans covered by title IV of
as follows:
the Employee Retirement Income
Security Act of 1974. The interest
§ 602.101 OMB Control numbers.
assumptions are intended to reflect
*
*
*
*
*
current conditions in the financial and
(b) * * *
annuity markets.
These interest assumptions are found
CFR part or section where
Current OMB
in two PBGC regulations: The regulation
identified and described
control No.
on Benefits Payable in Terminated
Single-Employer Plans (29 CFR part
4022) and the regulation on Allocation
*
*
*
*
*
1.108(i)–1T ...........................
1545–2147 of Assets in Single-Employer Plans (29
CFR part 4044). Assumptions under the
*
*
*
*
*
asset allocation regulation are updated
quarterly; assumptions under the benefit
*
*
*
*
*
payments regulation are updated
monthly. This final rule updates only
Steven T. Miller,
the assumptions under the benefit
Deputy Commissioner for Services and
payments regulation.
Enforcement.
Two sets of interest assumptions are
Approved: August 6, 2010.
prescribed under the benefit payments
Michael Mundaca,
regulation: (1) A set for PBGC to use to
Assistant Secretary of the Treasury (Tax
determine whether a benefit is payable
Policy).
as a lump sum and to determine lump[FR Doc. 2010–20060 Filed 8–11–10; 11:15 am]
sum amounts to be paid by PBGC (found
BILLING CODE 4830–01–P
in Appendix B to Part 4022), and (2) a
set for private-sector pension
practitioners to refer to if they wish to
use lump-sum interest rates determined
PENSION BENEFIT GUARANTY
using PBGC’s historical methodology
CORPORATION
(found in Appendix C to Part 4022).
29 CFR Part 4022
This amendment (1) adds to
Appendix B to Part 4022 the interest
Benefits Payable in Terminated Single- assumptions for PBGC to use for its own
Employer Plans; Interest Assumptions lump-sum payments in plans with
for Valuing and Paying Benefits
valuation dates during September 2010,
and (2) adds to Appendix C to Part 4022
AGENCY: Pension Benefit Guaranty
the interest assumptions for privateCorporation.
sector pension practitioners to refer to if
ACTION: Final rule.
they wish to use lump-sum interest rates
determined using PBGC’s historical
SUMMARY: Pension Benefit Guaranty
methodology for valuation dates during
Corporation’s regulation on Benefits
Payable in Terminated Single-Employer September 2010.
The interest assumptions that PBGC
Plans prescribes interest assumptions
will use for its own lump-sum payments
for valuing and paying certain benefits
(set forth in Appendix B to Part 4022)
under terminating single-employer
will be 2.25 percent for the period
plans. This final rule amends the benefit
during which a benefit is in pay status
payments regulation to adopt interest
and 4.00 percent during any years
assumptions for plans with valuation
preceding the benefit’s placement in pay
dates in September 2010. Interest
status. In comparison with the interest
assumptions are also published on
assumptions in effect for August 2010,
PBGC’s Web site (https://www.pbgc.gov).
these interest assumptions are
DATES: Effective September 1, 2010.
unchanged. For private-sector
FOR FURTHER INFORMATION CONTACT:
payments, the interest assumptions (set
Catherine B. Klion, Manager, Regulatory forth in Appendix C to part 4022) will
and Policy Division, Legislative and
be the same as those used by PBGC for
Regulatory Department, Pension Benefit determining and paying lump sums (set
Guaranty Corporation, 1200 K Street,
forth in Appendix B to Part 4022).
PART 602—OMB CONTROL NUMBERS
UNDER THE PAPERWORK
REDUCTION ACT
PO 00000
Frm 00057
Fmt 4700
Sfmt 4700
E:\FR\FM\13AUR1.SGM
13AUR1
49408
Federal Register / Vol. 75, No. 156 / Friday, August 13, 2010 / Rules and Regulations
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 in plans with
valuation dates during September 2010,
PBGC finds that good cause exists for
making the assumptions set forth in this
amendment effective less than 30 days
after publication.
For plans with a valuation
date
Rate set
On or after
*
Before
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).
203
9–1–10
3. In appendix C to Part 4022, Rate Set
203, is added to the table, as set forth
below:
In consideration of the foregoing, 29
CFR Part 4022 is amended as follows:
For plans with a valuation
date
On or after
*
Before
*
203
9–1–10
BILLING CODE 7709–01–P
DEPARTMENT OF HOMELAND
SECURITY
Coast Guard
33 CFR Parts 1, 114, 115, 116, 117, and
118
erowe on DSK5CLS3C1PROD with RULES
[Docket No. USCG–2010–0351]
RIN 1625–ZA25
Navigation and Navigable Waters;
Technical, Organizational, and
Conforming Amendments, Bridges
AGENCY:
Coast Guard, DHS.
VerDate Mar<15>2010
15:00 Aug 12, 2010
*
2.25
Jkt 220001
*
*
*
i3
*
4.00
n1
*
4.00
4.00
n2
*
7
8
n1
n2
Appendix C to Part 4022—Lump Sum
Interest Rates for Private-Sector
Payments
*
*
*
*
Deferred annuities
(percent)
Immediate
annuity rate
(percent)
10–1–10
[FR Doc. 2010–20000 Filed 8–12–10; 8:45 am]
*
i2
i1
i1
*
Issued in Washington, DC, on this 6th day
of August 2010.
Vincent K. Snowbarger,
Deputy Director for Operations, Pension
Benefit Guaranty Corporation.
*
Deferred annuities
(percent)
Immediate
annuity rate
(percent)
*
Rate set
Appendix B to Part 4022—Lump Sum
Interest Rates For PBGC Payments
■
*
■
Authority: 29 U.S.C. 1302, 1322, 1322b,
1341(c)(3)(D), and 1344.
2. In appendix B to Part 4022, Rate Set
203, is added to the table, as set forth
below:
Employee benefit plans, Pension
insurance, Pensions, Reporting and
recordkeeping requirements.
10–1–10
1. The authority citation for Part 4022
continues to read as follows:
■
■
List of Subjects in 29 CFR Part 4022
*
PART 4022—BENEFITS PAYABLE IN
TERMINATED SINGLE–EMPLOYER
PLANS
i2
*
2.25
ACTION:
i3
*
4.00
4.00
Final rule.
This rule makes nonsubstantive changes throughout our
regulations. The purpose of this rule is
to make conforming amendments and
technical corrections to Coast Guard
bridge and navigable waters regulations.
This rule will have no substantive effect
on the regulated public.
DATES: This final rule is effective August
13, 2010.
ADDRESSES: Comments and material
received from the public, as well as
documents mentioned in this preamble
as being available in the docket, are part
of docket USCG–2010–0351 and are
available for inspection or copying at
the Docket Management Facility (M–30),
U.S. Department of Transportation,
West Building Ground Floor, Room
W12–140, 1200 New Jersey Avenue, SE.,
Washington, DC 20590, between 9 a.m.
and 5 p.m., Monday through Friday,
except Federal holidays. You may also
SUMMARY:
PO 00000
Frm 00058
Fmt 4700
Sfmt 4700
*
4.00
*
7
8
find this docket on the Internet by going
to https://www.regulations.gov, inserting
USCG–2010–0351 in the ‘‘Keyword’’
box, and then clicking ‘‘Search.’’
FOR FURTHER INFORMATION CONTACT: If
you have questions on this rule, call or
e-mail Diane LaCumsky, Coast Guard;
telephone 202–372–1025, e-mail
Diane.M.LaCumsky@uscg.mil. If you
have questions on viewing the docket,
call Renee V. Wright, Program Manager,
Docket Operations, telephone 202–366–
9826.
SUPPLEMENTARY INFORMATION:
Regulatory History
We did not publish a notice of
proposed rulemaking (NPRM) for this
rule. Under 5 U.S.C. 553(b)(3)(A), the
Coast Guard finds this rule is exempt
from notice and comment rulemaking
requirements because these changes
involve rules of agency organization,
procedure, or practice. In addition, the
Coast Guard finds notice and comment
E:\FR\FM\13AUR1.SGM
13AUR1
]]>Agencies
[Federal Register Volume 75, Number 156 (Friday, August 13, 2010)]
[Rules and Regulations]
[Pages 49407-49408]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-20000]
=======================================================================
-----------------------------------------------------------------------
PENSION BENEFIT GUARANTY CORPORATION
29 CFR Part 4022
Benefits Payable in Terminated Single-Employer Plans; Interest
Assumptions for Valuing and Paying Benefits
AGENCY: Pension Benefit Guaranty Corporation.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: Pension Benefit Guaranty Corporation's regulation on Benefits
Payable in Terminated Single-Employer Plans prescribes interest
assumptions for valuing and paying certain benefits under terminating
single-employer plans. This final rule amends the benefit payments
regulation to adopt interest assumptions for plans with valuation dates
in September 2010. Interest assumptions are also published on PBGC's
Web site (https://www.pbgc.gov).
DATES: Effective September 1, 2010.
FOR FURTHER INFORMATION CONTACT: Catherine B. Klion, Manager,
Regulatory and Policy Division, Legislative and Regulatory Department,
Pension Benefit Guaranty Corporation, 1200 K Street, NW., Washington,
DC 20005, 202-326-4024. (TTY/TDD users may call the Federal relay
service toll-free at 1-800-877-8339 and ask to be connected to 202-326-
4024.)
SUPPLEMENTARY INFORMATION: PBGC's regulations prescribe actuarial
assumptions--including interest assumptions--for valuing and paying
plan benefits of terminating single-employer plans covered by title IV
of the Employee Retirement Income Security Act of 1974. The interest
assumptions are intended to reflect current conditions in the financial
and annuity markets.
These interest assumptions are found in two PBGC regulations: The
regulation on Benefits Payable in Terminated Single-Employer Plans (29
CFR part 4022) and the regulation on Allocation of Assets in Single-
Employer Plans (29 CFR part 4044). Assumptions under the asset
allocation regulation are updated quarterly; assumptions under the
benefit payments regulation are updated monthly. This final rule
updates only the assumptions under the benefit payments regulation.
Two sets of interest assumptions are prescribed under the benefit
payments regulation: (1) A set for PBGC to use to determine whether a
benefit is payable as a lump sum and to determine lump-sum amounts to
be paid by PBGC (found in Appendix B to Part 4022), and (2) a set for
private-sector pension practitioners to refer to if they wish to use
lump-sum interest rates determined using PBGC's historical methodology
(found in Appendix C to Part 4022).
This amendment (1) adds to Appendix B to Part 4022 the interest
assumptions for PBGC to use for its own lump-sum payments in plans with
valuation dates during September 2010, and (2) adds to Appendix C to
Part 4022 the 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 for valuation dates
during September 2010.
The interest assumptions that PBGC will use for its own lump-sum
payments (set forth in Appendix B to Part 4022) will be 2.25 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 August 2010,
these interest assumptions are unchanged. For private-sector payments,
the interest assumptions (set forth in Appendix C to part 4022) will be
the same as those used by PBGC for determining and paying lump sums
(set forth in Appendix B to Part 4022).
[[Page 49408]]
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 in plans with valuation dates during September
2010, 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.
0
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 203, is added to the table, as
set forth below:
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) i1 i2 i3 n1 n2
--------------------------------------------------------------------------------------------------------------------------------------------------------
* * * * * * *
--------------------------------------------------------------------------------------------------------------------------------------------------------
203 9-1-10 10-1-10 2.25 4.00 4.00 4.00 7 8
--------------------------------------------------------------------------------------------------------------------------------------------------------
0
3. In appendix C to Part 4022, Rate Set 203, is added to the table, as
set forth below:
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) i1 i2 i3 n1 n2
--------------------------------------------------------------------------------------------------------------------------------------------------------
* * * * * * *
--------------------------------------------------------------------------------------------------------------------------------------------------------
203 9-1-10 10-1-10 2.25 4.00 4.00 4.00 7 8
--------------------------------------------------------------------------------------------------------------------------------------------------------
Issued in Washington, DC, on this 6th day of August 2010.
Vincent K. Snowbarger,
Deputy Director for Operations, Pension Benefit Guaranty Corporation.
[FR Doc. 2010-20000 Filed 8-12-10; 8:45 am]
BILLING CODE 7709-01-P
