Allocation of Assets in Single-Employer Plans; Benefits Payable in Terminated Single-Employer Plans; Interest Assumptions for Valuing and Paying Benefits, 46641-46642 [2018-19835]
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Federal Register / Vol. 83, No. 179 / Friday, September 14, 2018 / Rules and Regulations
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By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 2018–20048 Filed 9–13–18; 8:45 am]
BILLING CODE 6750–01–P
PENSION BENEFIT GUARANTY
CORPORATION
29 CFR Parts 4022 and 4044
Allocation of Assets in SingleEmployer Plans; Benefits Payable in
Terminated Single-Employer Plans;
Interest Assumptions for Valuing and
Paying Benefits
Pension Benefit Guaranty
Corporation.
ACTION: Final rule.
AGENCY:
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 (rifkin.melissa@
PBGC.gov), 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.)
daltland on DSKBBV9HB2PROD with RULES
SUMMARY:
VerDate Sep<11>2014
16:08 Sep 13, 2018
Jkt 244001
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 singleemployer 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
(https://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
SUPPLEMENTARY INFORMATION:
PO 00000
Frm 00015
Fmt 4700
Sfmt 4700
46641
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
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.
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
*
E:\FR\FM\14SER1.SGM
*
*
14SER1
*
*
46642
Federal Register / Vol. 83, No. 179 / Friday, September 14, 2018 / Rules and Regulations
For plans with a valuation date
Rate
set
On or after
*
Before
*
300 ....
10–1–18
For plans with a valuation date
*
*
10–1–18
*
*
4.00
7
8
*
Deferred annuities
(percent)
i2
i1
*
4.00
i3
n1
*
4.00
n2
*
*
4.00
7
8
Authority: 29 U.S.C. 1301(a), 1302(b)(3),
1341, 1344, 1362.
Appendix B to Part 4044—Interest
Rates Used to Value Benefits
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:
*
it
*
*
October–December 2018 .........................
for t =
*
0.0284
Issued in Washington, DC.
Hilary Duke,
Assistant General Counsel, Pension Benefit
Guaranty Corporation.
DATES:
it
*
*
*
*
1–20
for t =
*
0.0276
This rule is effective October 15,
2018.
FOR FURTHER INFORMATION CONTACT:
Theresa B. Anderson
(anderson.theresa@pbgc.gov), Deputy
Assistant General Counsel, Office of the
General Counsel, Pension Benefit
Guaranty Corporation, 1200 K Street
NW, Washington DC 20005–4026; 202–
326–4400, ext. 6353. (TTY users may
call the Federal relay service toll-free at
800–877–8339 and ask to be connected
to 202–326–4400, extension 6353.)
SUPPLEMENTARY INFORMATION:
[FR Doc. 2018–19835 Filed 9–13–18; 8:45 am]
BILLING CODE 7709–02–P
PENSION BENEFIT GUARANTY
CORPORATION
29 CFR Part 4231
RIN 1212–AB31
Mergers and Transfers Between
Multiemployer Plans
Executive Summary
Purpose of the Regulatory Action
Pension Benefit Guaranty
Corporation.
ACTION: Final rule.
AGENCY:
PBGC is issuing a final rule
amending its regulation on Mergers and
Transfers Between Multiemployer Plans
to implement procedures and
information requirements for a request
for a facilitated merger. This final rule
also reorganizes and updates provisions
in the existing regulation.
Jkt 244001
n2
*
The values of it are:
For valuation dates occurring in the
month—
SUMMARY:
n1
*
4.00
■
4. The authority citation for part 4044
continues to read as follows:
daltland on DSKBBV9HB2PROD with RULES
*
1.25
■
16:08 Sep 13, 2018
*
*
11–1–18
PART 4044—ALLOCATION OF
ASSETS IN SINGLE-EMPLOYER
PLANS
VerDate Sep<11>2014
*
Immediate
annuity rate
(percent)
Before
i3
Appendix C to Part 4022—Lump Sum
Interest Rates For Private-Sector
Payments
*
300 ....
*
4.00
1.25
3. In appendix C to part 4022, Rate Set
300 is added at the end of the table to
read as follows:
On or after
i2
i1
*
11–1–18
■
Rate
set
Deferred annuities
(percent)
Immediate
annuity rate
(percent)
This final rule is needed to implement
statutory changes under the
Multiemployer Pension Reform Act of
2014 (MPRA) affecting mergers of
multiemployer plans under title IV of
the Employee Retirement Income
Security Act of 1974 (ERISA) and to
update PBGC’s existing regulatory
requirements applicable to mergers and
transfers between multiemployer plans.
On June 6, 2016, PBGC published a
PO 00000
Frm 00016
Fmt 4700
Sfmt 4700
it
for t =
*
>20
*
N/A
N/A
proposed rule to amend its regulation
on Mergers and Transfers Between
Multiemployer Plans (81 FR 36229). In
this final rule, PBGC adopts its
proposed changes implementing MPRA,
with some modifications in response to
public comments, and some of its
proposed changes updating and
reorganizing the existing regulation. To
allow more consideration of the
concerns raised by the public
comments, PBGC is not adopting its
proposed changes to provisions of the
existing regulation related to plan
solvency.
PBGC’s legal authority for this action
is based on section 4002(b)(3) of ERISA,
which authorizes PBGC to issue
regulations to carry out the purposes of
title IV of ERISA, and section 4231 of
ERISA, which sets forth the statutory
requirements for mergers and transfers
between multiemployer plans.
Major Provisions of the Regulatory
Action
This final rule makes one major and
numerous minor changes to PBGC’s
regulation on Mergers and Transfers
E:\FR\FM\14SER1.SGM
14SER1
]]>Agencies
[Federal Register Volume 83, Number 179 (Friday, September 14, 2018)]
[Rules and Regulations]
[Pages 46641-46642]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[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 (https://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
