The Pension Benefit Guaranty Corporation (PBGC) on Sept. 14 issued a final rule, amending its regulation on Allocation of Assets in Single-Employer Plans to prescribe interest assumptions under the asset allocation regulation for plans with valuation dates in the fourth quarter of 2022. The amendments are effective Oct. 1, 2022.
Under the final rule, the fourth quarter 2022 interest assumptions will be 3.90% for the first 20 years following the valuation date and 3.65% thereafter. These interest assumptions are higher than those in effect for the third quarter of 2022— an increase of 1.09% in the select rate and an increase of 0.71% in the final rate.
The PBGC uses the interest assumptions in Appendix B to part 4044 of the regulations to determine the present value of annuities in an involuntary or distress termination of a single-employer plan under the asset allocation regulation. The assumptions also are used to determine the value of multiemployer plan benefits and certain assets when a plan terminates by mass withdrawal in accordance with PBGC’s regulation on Duties of Plan Sponsor Following Mass Withdrawal (29 CFR part 4281).
This final rule is scheduled to be published in the Federal Register on Sept. 15, 2022.
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