Rule2025-12319
Allocation of Assets in Single-Employer Plans; Interest Assumptions for Valuing Benefits
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
July 2, 2025
Effective
July 31, 2025
Issuing agencies
Pension Benefit Guaranty Corporation
Abstract
This final rule amends the Pension Benefit Guaranty Corporation's regulation on Allocation of Assets in Single-Employer Plans to prescribe the spreads component of the interest assumption under the asset allocation regulation for plans with valuation dates of July 31, 2025-October 30, 2025. These interest assumptions are used for valuing benefits under terminating single-employer plans and for other purposes.
Full Text
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<title>Federal Register, Volume 90 Issue 125 (Wednesday, July 2, 2025)</title>
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[Federal Register Volume 90, Number 125 (Wednesday, July 2, 2025)]
[Rules and Regulations]
[Pages 28899-28901]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-12319]
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PENSION BENEFIT GUARANTY CORPORATION
29 CFR Part 4044
Allocation of Assets in Single-Employer Plans; Interest
Assumptions for Valuing Benefits
AGENCY: Pension Benefit Guaranty Corporation.
ACTION: Final rule.
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SUMMARY: This final rule amends the Pension Benefit Guaranty
Corporation's regulation on Allocation of Assets in Single-Employer
Plans to prescribe the spreads component of the interest assumption
under the asset allocation regulation for plans with valuation dates of
July 31, 2025-October 30, 2025. These interest assumptions are used for
valuing benefits under terminating single-employer plans and for other
purposes.
DATES: Effective July 31, 2025.
FOR FURTHER INFORMATION CONTACT: Monica O'Donnell
(<a href="/cdn-cgi/l/email-protection#442b202b2a2a2128286a292b2a2d272504342623276a232b32"><span class="__cf_email__" data-cfemail="711e151e1f1f141d1d5f1c1e1f18121031011316125f161e07">[email protected]</span></a>), Attorney, Office of the General Counsel,
Pension Benefit Guaranty Corporation, 445 12th Street SW, Washington,
DC 20024-2101, 202-229-5507. If you are deaf or hard of hearing, or
have a speech disability, please dial 7-1-1 to access
telecommunications relay services.
SUPPLEMENTARY INFORMATION: PBGC's regulation on Allocation of Assets in
Single-Employer Plans (29 CFR part 4044) prescribes actuarial
assumptions--including an interest assumption--for valuing benefits
under terminating single-employer plans covered by title IV of the
Employee Retirement Income Security Act of 1974 (ERISA). The interest
assumption is also posted on PBGC's website (<a href="http://www.pbgc.gov">www.pbgc.gov</a>).
PBGC uses the interest assumption in Sec. 4044.54 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 in part 4044 of PBGC's regulations are also used in other
situations where it is appropriate for liabilities to align with
private sector group annuity prices. For example, PBGC's regulations on
Notice, Collection, and Redetermination of Withdrawal Liability (29 CFR
part 4219) and Duties of Plan Sponsor Following Mass Withdrawal (29 CFR
part 4281) provide that these assumptions are used to value liabilities
for purposes of determining withdrawn employers' reallocation liability
in the event of a mass withdrawal from a multiemployer plan.
Multiemployer plans that receive special financial assistance under the
regulation on Special Financial Assistance by PBGC (29 CFR part 4262)
must, as a condition of receiving special financial assistance, use the
interest assumption to determine withdrawal liability for a prescribed
period. Additionally, plan sponsors are required to use some, or all of
these assumptions for specified purposes (e.g., reporting benefit
liabilities in filings required under PBGC's regulation on Annual
Financial and Actuarial Information Reporting (29 CFR part 4010) or
determining certain amounts to transfer to PBGC's Missing Participants
Program on behalf of a missing participant of a terminating defined
benefit plan under PBGC's regulation on Missing Participants (29 CFR
part 4050)) and may use them for other purposes (e.g., to ensure that
plan spinoffs comply with section 414(l) of the Internal Revenue Code).
Part 4044 of PBGC's regulations provides that the interest
assumption for part 4044 purposes is a yield curve (i.e., the ``4044
yield curve'') that is based on a blend of two publicly available bond
yield curves that is adjusted to the extent necessary so that the
resulting liabilities align with group annuity prices. The adjustments
are referred to as ``spreads.'' PBGC determines and publishes spreads
quarterly based on survey data on pricing of private-sector group
annuities. PBGC posts the 4044 yield curve on its website at
<a href="http://www.pbgc.gov">www.pbgc.gov</a> each month shortly after its underlying data become
available. In addition, practitioners are able to determine the 4044
yield curve as of the end of any month using the publicly available
bond yield curves and the spreads specified in the regulation.
This rule amends the regulation to specify the spreads used to
determine the 4044 yield curve as of the last days of July, August, and
September of 2025 (i.e., the ``third quarter 2025 spreads''). Due to
space constraints, table 1 to paragraph (e) shows spreads for only the
most recent four quarters. Because the third quarter 2025 spreads would
be the fifth set of spreads, this rule removes the third quarter 2024
spreads. In the future, PBGC similarly plans to remove the oldest of
the spreads. Historical spreads are available on <a href="http://www.pbgc.gov">www.pbgc.gov</a>, along
with more recent spreads.
This rule also amends paragraphs (e)(3)(i) and (e)(3)(ii) of Sec.
4044.54, which provide examples of how to choose the appropriate
blended market yield curve and spreads for a given valuation date.
These examples currently direct practitioners to use table 1 to
paragraph (e) to find the applicable spreads for the valuation date.
PBGC is amending the examples by directing practitioners to the
quarterly spreads available on PBGC's website, <a href="http://www.pbgc.gov">www.pbgc.gov</a>, instead of
to table 1 to paragraph (e) so that the wording of the examples does
not need to be updated with the passage of time.
Need for Immediate Guidance
PBGC has determined that notice of, and public comment on, this
rule are impracticable, unnecessary, and contrary to the public
interest. PBGC routinely updates the spreads component of the interest
assumption in the asset allocation regulation so that the 4044 yield
curve may be determined as soon as the underlying bond yield curves
become available. These amendments are merely technical; they ensure
that use of PBGC's interest assumption continues to yield liabilities
in line with group annuity prices. Accordingly, PBGC finds that the
public interest is best served by issuing this rule expeditiously,
without an opportunity for notice and comment, and that good cause
exists for making the assumptions set forth in this amendment effective
less than 30 days after publication.
PBGC has determined that this action is not a ``significant
regulatory action'' under the criteria set forth in Executive Order
12866.
Because no general notice of proposed rulemaking is required for
this amendment, the Regulatory Flexibility Act of 1980 does not apply.
See 5 U.S.C. 601(2).
List of Subjects in 29 CFR Part 4044
Employee benefit plans, Pension insurance, Pensions.
For the reasons stated in the preamble, PBGC amends 29 CFR part
4044 as follows.
PART 4044--ALLOCATION OF ASSETS IN SINGLE-EMPLOYER PLANS
0
1. The authority citation for part 4044 continues to read as follows:
Authority: 29 U.S.C. 1301(a), 1302(b)(3), 1341, 1344, 1362.
[[Page 28900]]
0
2. Amend Sec. 4044.54 by revising paragraphs (e)(3)(i) and (ii) and
table 1 to paragraph (e) to read as follows:
Sec. 4044.54 Interest assumptions.
* * * * *
(e) * * *
(3) * * *
(i) Example 1--August 31, 2024, valuation date. Because the
valuation date is the last day of a month, the applicable blended
market yield curve determined under paragraph (d)(1) of this section is
the blended market yield curve as of that date. Because August 31,
2024, is in the third calendar quarter of 2024, the applicable spreads
are the third quarter 2024 spreads, available on <a href="http://www.pbgc.gov">www.pbgc.gov</a>.
(ii) Example 2--November 15, 2024, valuation date. Because the
valuation date is not the last day of a month, the applicable blended
market yield curve determined under paragraph (d)(1) of this section is
the blended market yield curve as of the last day of the month before
the month containing the valuation date, October 31, 2024. Because
October 31, 2024, is in the fourth calendar quarter of 2024, the
applicable spreads are the fourth quarter 2024 spreads, available on
<a href="http://www.pbgc.gov">www.pbgc.gov</a>.
Table 1 to Paragraph (e)--Spreads
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Fourth quarter First quarter Second quarter Third quarter
Maturity point 2024 spreads 2025 spreads 2025 spreads 2025 spreads
(percent) (percent) (percent) (percent)
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0.5................................. 0.33 0.36 0.38 0.40
1.0................................. 0.33 0.36 0.38 0.40
1.5................................. 0.33 0.36 0.37 0.40
2.0................................. 0.33 0.36 0.37 0.40
2.5................................. 0.33 0.36 0.37 0.40
3.0................................. 0.33 0.36 0.37 0.40
3.5................................. 0.33 0.36 0.37 0.39
4.0................................. 0.33 0.36 0.37 0.39
4.5................................. 0.33 0.36 0.37 0.39
5.0................................. 0.33 0.36 0.37 0.39
5.5................................. 0.32 0.35 0.36 0.38
6.0................................. 0.32 0.35 0.36 0.38
6.5................................. 0.32 0.35 0.35 0.37
7.0................................. 0.32 0.35 0.35 0.37
7.5................................. 0.32 0.35 0.35 0.36
8.0................................. 0.32 0.35 0.35 0.36
8.5................................. 0.32 0.34 0.34 0.34
9.0................................. 0.32 0.34 0.34 0.34
9.5................................. 0.32 0.34 0.33 0.33
10.0................................ 0.32 0.34 0.33 0.33
10.5................................ 0.32 0.33 0.32 0.32
11.0................................ 0.32 0.33 0.32 0.32
11.5................................ 0.32 0.33 0.32 0.30
12.0................................ 0.32 0.33 0.32 0.30
12.5................................ 0.32 0.32 0.31 0.28
13.0................................ 0.32 0.32 0.31 0.28
13.5................................ 0.31 0.32 0.30 0.27
14.0................................ 0.31 0.32 0.30 0.27
14.5................................ 0.31 0.31 0.29 0.25
15.0................................ 0.31 0.31 0.29 0.25
15.5................................ 0.31 0.30 0.28 0.24
16.0................................ 0.31 0.30 0.28 0.24
16.5................................ 0.31 0.30 0.27 0.22
17.0................................ 0.31 0.30 0.27 0.22
17.5................................ 0.31 0.29 0.26 0.20
18.0................................ 0.31 0.29 0.26 0.20
18.5................................ 0.31 0.29 0.25 0.19
19.0................................ 0.31 0.29 0.25 0.19
19.5................................ 0.30 0.28 0.24 0.17
20.0................................ 0.30 0.28 0.24 0.17
20.5................................ 0.30 0.28 0.23 0.16
21.0................................ 0.30 0.28 0.23 0.16
21.5................................ 0.30 0.27 0.22 0.14
22.0................................ 0.30 0.27 0.22 0.14
22.5................................ 0.30 0.27 0.22 0.13
23.0................................ 0.30 0.27 0.22 0.13
23.5................................ 0.30 0.26 0.21 0.12
24.0................................ 0.30 0.26 0.21 0.12
24.5................................ 0.30 0.26 0.20 0.11
25.0................................ 0.30 0.26 0.20 0.11
25.5................................ 0.30 0.26 0.20 0.10
26.0................................ 0.30 0.26 0.20 0.10
26.5................................ 0.30 0.26 0.20 0.09
27.0................................ 0.30 0.26 0.20 0.09
27.5................................ 0.30 0.25 0.19 0.09
28.0................................ 0.30 0.25 0.19 0.09
28.5................................ 0.30 0.25 0.19 0.09
[[Page 28901]]
29.0................................ 0.30 0.25 0.19 0.09
29.5................................ 0.30 0.25 0.19 0.09
30.0................................ 0.30 0.25 0.19 0.09
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* * * * *
Dated: June 26, 2025.
Hilary Duke,
Assistant General Counsel for Regulatory Affairs, Pension Benefit
Guaranty Corporation.
[FR Doc. 2025-12319 Filed 7-1-25; 8:45 am]
BILLING CODE 7709-02-P
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