Daily Rules, Proposed Rules, and Notices of the Federal Government
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. Pursuant to the Pension Protection Act of 2006, for premium payment years beginning in 2006 or 2007, the required interest rate is the “applicable percentage” (currently 85 percent) of the annual rate of interest determined by the Secretary of the Treasury on amounts invested conservatively in long-term investment grade corporate bonds for the month preceding the beginning of the plan year for which premiums are being paid (the “premium payment year”). Thus, the required interest rate to be used in determining variable-rate premiums for premium payment years beginning in December 2006 is 4.90 percent (i.e., 85 percent of the 5.77 percent composite corporate bond rate for November 2006 as determined by the Treasury).
The following table lists the required interest rates to be used in determining variable-rate premiums for premium payment years beginning between January 2006 and December 2006.
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 January 2007 under part 4044 are contained in an amendment to part 4044 published elsewhere in today's