The Pension Benefit Guaranty Corporation (PBGC) on June 14 issued a final rule amending its regulations on benefits payable in terminated single-employer plans and allocation of assets in single-employer plans. The amendments prescribe interest assumptions under the benefit payments regulation for valuation dates in July 2016 and interest assumptions under the asset allocation regulation for valuation dates in the third quarter of 2016.
The PBGC’s regulations on allocation of assets in single-employer plans and benefits payable in terminated single-employer plans prescribe actuarial assumptions — including interest assumptions — for valuing and paying plan benefits under terminating single-employer plans covered by title IV of ERISA.
The regulation amends 29 CFR parts 4022 and 4044 in the following ways:
The rule is effective July 1, 2016.
The PBGC’s regulations on allocation of assets in single-employer plans and benefits payable in terminated single-employer plans prescribe actuarial assumptions — including interest assumptions — for valuing and paying plan benefits under terminating single-employer plans covered by title IV of ERISA.
The regulation amends 29 CFR parts 4022 and 4044 in the following ways:
- This final rule updates the benefit payments interest assumptions for July 2016 and updates the asset allocation interest assumptions for the third quarter (July through September) of 2016.
- The third quarter 2016 interest assumptions under the Part 4044 allocation regulation will be 2.5% for the first 20 years following the valuation date and 2.85% thereafter.
- The July 2016 interest assumptions under the Part 4022 benefit payments regulation will be 0.75% for the period during which a benefit is in pay status and 4% during any years preceding the benefit’s placement in pay status.
The rule is effective July 1, 2016.
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