The PBGC issued a final rule Dec. 14 that amends 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 first quarter of 2022. These interest assumptions are used for valuing benefits under terminating single-employer plans and for other purposes.
The first quarter 2022 interest assumptions will be 2.37% for the first 20 years following the valuation date and 2.03% thereafter. The new rates compare to those of the 4th quarter of 2021 as follows:
The fourth quarter 2021 rates compare to those of the third quarter as follows:
| Measure | Change, Q4 to Q1 |
| Select rate | - 0.03% |
| Ultimate (final) rate | - 0.08% |
And the rates for the first quarter of 2022 compare to those of the first quarter of 2021 as follows:
| Measure | Q1 2021 | Q1 2022 | Change, Q1 2021 to Q1 2022 |
| Interest assumptions for the first 20 years following the valuation date | 1.69% | 2.37% | +0.68% |
| Interest assumptions for years after the first 20 years following the valuation date | 1.66% | 2.03% | +0.37% |
The PBGC uses the interest assumptions in appendix B to part 4044 to determine the present value of annuities in an involuntary or distress termination of a single-employer plan under the asset allocation regulation. It also uses the assumptions to determine the value of multiemployer plan benefits and certain assets when a plan terminates by mass withdrawal in accordance with its regulation on Duties of Plan Sponsor Following Mass Withdrawal (29 CFR part 4281).
Effective Date
The first quarter 2021 interest assumptions will be effective Jan. 1, 2022. They appear in the Federal Register of Dec. 15, 2021.
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