Allocation of Assets in Single-Employer Plans; Benefits Payable in Terminated Single-Employer Plans; Interest Assumptions for Valuing and Paying Benefits, 15376-15377 [2020-05545]
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15376
Federal Register / Vol. 85, No. 53 / Wednesday, March 18, 2020 / Rules and Regulations
rule. For that reason, the requirements
of the Regulatory Flexibility Act do not
apply.
Unfunded Mandates Reform Act of 1995
This final rule will not result in the
expenditure by State, local, or tribal
governments, in the aggregate, or by the
private sector, of $100 million or more
in any one year, and it will not
significantly or uniquely affect small
governments. Therefore, no actions were
deemed necessary under the provisions
of the Unfunded Mandates Reform Act
of 1995.
Congressional Review Act
The Congressional Review Act (CRA)
requires that before a rule may take
effect, the agency promulgating the rule
must submit a rule report, which
includes a copy of the rule, to each
House of the Congress and to the
Comptroller General of the United
States. EEOC will submit a report
containing this rule and other required
information to the U.S. Senate, the U.S.
House of Representatives, and the
Comptroller General of the United
States prior to the effective date of the
rule. Under the CRA, a major rule
cannot take effect until 60 days after it
is published in the Federal Register.
This action is not a ‘‘major rule’’ as
defined by the CRA at 5 U.S.C. 804(2).
List of Subjects in 29 CFR Part 1601
Administrative practice and
procedure.
Dated: March 9, 2020.
Janet L. Dhillon,
Chair, Equal Employment Opportunity
Commission.
Accordingly, the Equal Employment
Opportunity Commission amends 29
CFR part 1601 as follows:
PART 1601—PROCEDURAL
REGULATIONS
1. The authority citation for part 1601
continues to read as follows:
Authority: 29 U.S.C. 621–634; 28 U.S.C.
2461 note; 5 U.S.C. 301; Pub. L. 99–502; 100
Stat. 3341; Secretary’s Order No. 10–68;
Secretary’s Order No. 11–68; sec. 2 Reorg.
Plan No. 1 of 1978, 43 FR 19807; Executive
Order 12067, 43 FR 28967.
2. Section 1601.30 is amended by
revising paragraph (b) to read as follows:
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■
Notices to be posted.
*
*
*
*
*
(b) Section 711(b) of Title VII and the
Federal Civil Penalties Inflation
Adjustment Act, as amended, make
failure to comply with this section
VerDate Sep<11>2014
18:10 Mar 17, 2020
Jkt 250001
[FR Doc. 2020–05225 Filed 3–17–20; 8:45 am]
BILLING CODE 6570–01–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 (PBGC).
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 certain interest
assumptions under the benefit payments
regulation for plans with valuation dates
in April 2020 and interest assumptions
under the asset allocation regulation for
plans with valuation dates in the second
quarter of 2020. These interest
assumptions are used for valuing
benefits and paying certain benefits
under terminating single-employer
plans covered by the pension insurance
system administered by PBGC.
DATES: Effective April 1, 2020.
FOR FURTHER INFORMATION CONTACT:
Gregory Katz (katz.gregory@pbgc.gov),
Attorney, Regulatory Affairs Division,
Pension Benefit Guaranty Corporation,
1200 K Street NW, Washington, DC
20005, 202–326–4400, ext. 3829. (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.
3829.)
SUMMARY:
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).
SUPPLEMENTARY INFORMATION:
■
§ 1601.30
punishable by a fine of not more than
$569 for each separate offense.
Lump Sum Interest Assumption
PBGC uses the interest assumptions in
appendix B to part 4022 (‘‘Lump Sum
PO 00000
Frm 00030
Fmt 4700
Sfmt 4700
Interest Rates for PBGC Payments’’) to
determine whether a benefit is payable
as a lump sum and to determine the
amount to pay as a lump sum. Because
some private-sector pension plans use
these interest rates to determine lump
sum amounts payable to plan
participants (if the resulting lump sum
is larger than the amount required under
section 417(e)(3) of the Internal Revenue
Code and section 205(g)(3) of ERISA),
these rates are also provided in
appendix C to part 4022 (‘‘Lump Sum
Interest Rates for Private-Sector
Payments’’).
This final rule updates appendices B
and C of the benefit payments regulation
to provide the rates for April 2020
measurement dates.
The April 2020 lump sum interest
assumptions will be 0.00 percent for the
period during which a benefit is (or is
assumed to be) 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 March 2020,
these assumptions represent no change
in the immediate rate and are otherwise
unchanged.
Valuation/Asset Allocation Interest
Assumptions
PBGC uses the interest assumptions in
appendix B to part 4044 (‘‘Interest Rates
Used to Value Benefits’’) to value
benefits for allocation purposes under
section 4044 of ERISA, and some
private-sector pension plans use them to
determine benefit liabilities reportable
under section 4044 of ERISA and for
other purposes. The second quarter
2020 interest assumptions will be 2.11
percent for the first 20 years following
the valuation date and 1.92 percent
thereafter. In comparison with the
interest assumptions in effect for the
first quarter of 2020, these interest
assumptions represent a decrease of 5
years in the select period (the period
during which the select rate (the initial
rate) applies), a decrease of 0.01 percent
in the select rate, and a decrease of 0.34
percent in the ultimate rate (the final
rate).
Need for Immediate Guidance
PBGC updates appendix B of the asset
allocation regulation each quarter and
appendices B and C of the benefit
payments regulation each month. 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 issue new interest assumptions
promptly so that they are available to
value benefits and, for plans that rely on
our publication of them each month or
E:\FR\FM\18MRR1.SGM
18MRR1
15377
Federal Register / Vol. 85, No. 53 / Wednesday, March 18, 2020 / Rules and Regulations
amendment, the Regulatory Flexibility
Act of 1980 does not apply. See 5 U.S.C.
601(2).
each quarter, to calculate lump sum
benefit amounts.
Because of the need to provide
immediate guidance for the valuation
and payment of benefits under plans
with valuation dates during April 2020,
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
Rate set
*
318
List of Subjects
*
*
5–1–20
0.00
3. In appendix C to part 4022, Rate Set
318 is added at the end of the table to
read as follows:
318
For plans with a valuation
date
Before
4–1–20
*
5–1–20
*
*
*
*
0.00
*
i2
*
*
*
4.00
4.00
*
*
jbell on DSKJLSW7X2PROD with RULES
*
7
8
n1
n2
7
8
*
Deferred annuities
(percent)
i1
i2
*
4.00
*
i3
*
*
4.00
4.00
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 ‘‘April—June 2020’’ is added at the
end of the table to read as follows:
*
*
*
*
*
The values of it are:
it
for t =
*
*
0.0211
it
*
1–20
for t =
*
*
0.0192
it
*
>20
BILLING CODE 7709–02–P
Jkt 250001
n2
*
4.00
[FR Doc. 2020–05545 Filed 3–17–20; 8:45 am]
18:10 Mar 17, 2020
*
n1
Issued in Washington, DC, by:
Hilary Duke,
Assistant General Counsel, Pension Benefit
Guaranty Corporation.
VerDate Sep<11>2014
*
i3
■
4. The authority citation for part 4044
continues to read as follows:
■
*
April–June 2020 ........................................
i1
Immediate
annuity rate
(percent)
PART 4044 — ALLOCATION OF
ASSETS IN SINGLE–EMPLOYER
PLANS
For valuation dates occurring in the
month—
Appendix B to Part 4022—Lump Sum
Interest Rates For PBGC Payments
Appendix C to Part 4022—Lump Sum
Interest Rates For Private-Sector
Payments
*
On or after
2. In appendix B to part 4022, Rate Set
318 is added at the end of the table to
read as follows:
■
Deferred annuities
(percent)
Immediate
annuity rate
(percent)
■
Rate set
Authority: 29 U.S.C. 1302, 1322, 1322b,
1341(c)(3)(D), and 1344.
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:
Before
4–1–20
1. The authority citation for part 4022
continues to read as follows:
■
29 CFR Part 4022
Employee benefit plans, Pension
insurance, Pensions, Reporting and
recordkeeping requirements.
For plans with a valuation
date
On or after
PART 4022—BENEFITS PAYABLE IN
TERMINATED SINGLE-EMPLOYER
PLANS
PO 00000
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for t =
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]]>Agencies
[Federal Register Volume 85, Number 53 (Wednesday, March 18, 2020)]
[Rules and Regulations]
[Pages 15376-15377]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-05545]
=======================================================================
-----------------------------------------------------------------------
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 (PBGC).
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 certain interest assumptions under the benefit payments
regulation for plans with valuation dates in April 2020 and interest
assumptions under the asset allocation regulation for plans with
valuation dates in the second quarter of 2020. These interest
assumptions are used for valuing benefits and paying certain benefits
under terminating single-employer plans covered by the pension
insurance system administered by PBGC.
DATES: Effective April 1, 2020.
FOR FURTHER INFORMATION CONTACT: Gregory Katz ([email protected]),
Attorney, Regulatory Affairs Division, Pension Benefit Guaranty
Corporation, 1200 K Street NW, Washington, DC 20005, 202-326-4400, ext.
3829. (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. 3829.)
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).
Lump Sum Interest Assumption
PBGC uses the interest assumptions in appendix B to part 4022
(``Lump Sum Interest Rates for PBGC Payments'') to determine whether a
benefit is payable as a lump sum and to determine the amount to pay as
a lump sum. Because some private-sector pension plans use these
interest rates to determine lump sum amounts payable to plan
participants (if the resulting lump sum is larger than the amount
required under section 417(e)(3) of the Internal Revenue Code and
section 205(g)(3) of ERISA), these rates are also provided in appendix
C to part 4022 (``Lump Sum Interest Rates for Private-Sector
Payments'').
This final rule updates appendices B and C of the benefit payments
regulation to provide the rates for April 2020 measurement dates.
The April 2020 lump sum interest assumptions will be 0.00 percent
for the period during which a benefit is (or is assumed to be) 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 March 2020, these assumptions represent no change in the
immediate rate and are otherwise unchanged.
Valuation/Asset Allocation Interest Assumptions
PBGC uses the interest assumptions in appendix B to part 4044
(``Interest Rates Used to Value Benefits'') to value benefits for
allocation purposes under section 4044 of ERISA, and some private-
sector pension plans use them to determine benefit liabilities
reportable under section 4044 of ERISA and for other purposes. The
second quarter 2020 interest assumptions will be 2.11 percent for the
first 20 years following the valuation date and 1.92 percent
thereafter. In comparison with the interest assumptions in effect for
the first quarter of 2020, these interest assumptions represent a
decrease of 5 years in the select period (the period during which the
select rate (the initial rate) applies), a decrease of 0.01 percent in
the select rate, and a decrease of 0.34 percent in the ultimate rate
(the final rate).
Need for Immediate Guidance
PBGC updates appendix B of the asset allocation regulation each
quarter and appendices B and C of the benefit payments regulation each
month. 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 issue new interest assumptions promptly
so that they are available to value benefits and, for plans that rely
on our publication of them each month or
[[Page 15377]]
each quarter, to calculate lump sum benefit amounts.
Because of the need to provide immediate guidance for the valuation
and payment of benefits under plans with valuation dates during April
2020, 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 318 is added at the end of the
table to read as follows:
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) i i i n n
--------------------------------------------------------------------------------------------------------------------------------------------------------
* * * * * * *
318 4-1-20 5-1-20 0.00 4.00 4.00 4.00 7 8
--------------------------------------------------------------------------------------------------------------------------------------------------------
0
3. In appendix C to part 4022, Rate Set 318 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
--------------------------------------------------------------------------------------------------------------------------------------------------------
* * * * * * *
318 4-1-20 5-1-20 0.00 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 ``April--June 2020'' 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 =
--------------------------------------------------------------------------------------------------------------------------------------------------------
* * * * * * *
April-June 2020......................................... 0.0211 1-20 0.0192 >20 N/A N/A
--------------------------------------------------------------------------------------------------------------------------------------------------------
Issued in Washington, DC, by:
Hilary Duke,
Assistant General Counsel, Pension Benefit Guaranty Corporation.
[FR Doc. 2020-05545 Filed 3-17-20; 8:45 am]
BILLING CODE 7709-02-P
