02-6428. Required Interest Rate Assumption for Determining Variable-Rate Premium; Interest Assumptions for Multiemployer Plan Valuations Following Mass Withdrawal

AGENCY:

Pension Benefit Guaranty Corporation.

ACTION:

Notice of interest rates and assumptions.

SUMMARY:

This notice informs the public of the interest assumptions for multiemployer plan valuations following mass withdrawal under the Pension Benefit Guaranty Corporation's regulation on Duties of Plan Sponsor Following Mass Withdrawal (part 4281). These assumptions are published elsewhere but are referenced in this notice for the convenience of the public. This notice also informs the public that announcement of the required interest rate for determining the variable-rate premium under the PBGC's regulation on Premium Rates is being deferred. The PBGC plans to announce the required interest rate well before the variable-rate premium is due. Interest rates are published on the PBGC's Web site (http://www.pbgc.gov).

DATES:

The interest assumptions for performing multiemployer plan valuations following mass withdrawal under part 4281 apply to valuation dates occurring in April 2002.

FOR FURTHER INFORMATION CONTACT:

Harold J. Ashner, Assistant General Counsel, Office of the General Counsel, Pension Benefit Guaranty Corporation, 1200 K Street, NW., Washington, DC 20005, 202-326-4024. (TTY/TDD users may call the Federal relay service toll-free at 1-800-877-8339 and ask to be connected to 202-326-4024.)

SUPPLEMENTARY INFORMATION:

Variable-Rate Premiums

Section 4006(a)(3)(E)(iii)(II) of the Employee Retirement Income Security Act of 1974 (ERISA) and § 4006.4(b)(1) of the PBGC's regulation on Premium Rates (29 CFR part 4006) prescribe use of an assumed interest rate (the “required interest rate”) in determining a single-employer plan's variable-rate premium. The required interest rate is the “applicable percentage” (currently 85 percent) of the annual yield on 30-year Treasury securities for the month preceding the beginning of the plan year for which premiums are being paid (the “premium payment year”). Until recently, that yield figure was reported in Federal Reserve Statistical Release H.15.

The Treasury Department has suspended issuance of 30-year Treasury securities and, effective February 18, 2002, ceased supplying the Federal Reserve board with an estimate of the annual yield on 30-year Treasury securities for publication in Statistical Release H.15. As a result of these changes, the PBGC is consulting with the Treasury Department on how best to determine the required interest rate. As soon as the PBGC determines the required interest rate to be used in determining variable-rate premiums for premium payment years beginning in March 2002, it will inform the public of the rate. This will be well before the variable-rate premium for premium payment years beginning in March 2002 is due.

Multiemployer Plan Valuations Following Mass Withdrawal

The PBGC's regulation on Duties of Plan Sponsor Following Mass Withdrawal (29 CFR part 4281) prescribes the use of interest assumptions under the PBGC's regulation on Allocation of Assets in Single-Employer Plans (29 CFR part 4044). The interest assumptions applicable to valuation dates in April 2002 under part 4044 are contained in an amendment to part 4044 published elsewhere in today's Federal Register. Tables showing the assumptions applicable to prior periods are codified in appendix B to 29 CFR part 4044.

Issued in Washington, DC, on this 12th day of March 2002.

Steven A. Kandarian,

Executive Director, Pension Benefit Guaranty Corporation.