Pension Plan Interest Assumption Updates
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-October 30, 2024. These interest assumptions are used for valuing benefits under terminating single-employer plans and for other purposes.
Compliance Requirements
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Use the spreads specified in Table 1 to Paragraph (e) of § 4044.54 to determine the 4044 yield curve as of the last days of July, August, and September of 2024; Multiemployer plans that receive special financial assistance under 29 CFR part 4262 must use the interest assumption to determine withdrawal liability for a prescribed period; Plan sponsors are required to use some, or all of these assumptions for specified purposes including reporting benefit liabilities in filings required under PBGC's regulation on Annual Financial and Actuarial Information Reporting (29 CFR part 4010); Plan sponsors are required to use some, or all of these assumptions for 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)
Deadline: 2024-07-31(July 31, 2024)
Market Impacts
Mandatory use of updated 4044 yield curve spreads for valuing benefits in terminating single-employer plans and other specified purposes, ensuring liabilities align with current group annuity prices; Mandatory use of the interest assumption for determining withdrawn employers' reallocation liability in mass withdrawals from multiemployer plans and for special financial assistance recipients; Required use of assumptions for reporting benefit liabilities in PBGC annual financial and actuarial information filings (29 CFR part 4010); Required use of assumptions for determining amounts to transfer to PBGC's Missing Participants Program for terminating defined benefit plans; PBGC will post the 4044 yield curve monthly on its website, creating opportunities for technology providers to develop automated solutions for practitioners
Validated Company Impacts
WILLIS TOWERS WATSON PLC
Willis Towers Watson is a global advisory, broking, and solutions company that provides actuarial services, pension consulting, and retirement plan administration services, directly aligning with the rule's requirements for actuarial calculations, pension plan valuations, and PBGC compliance. The company's core business segments include serving as plan sponsors, providing actuarial consulting for defined benefit plans, and offering services related to plan terminations and withdrawal liability calculations. The company's single regulatory risk factor ('Regulatory changes') shows minimal alignment with this specific PBGC rule, which targets pension plan sponsors and administrators. The company's disclosed risks focus on operational, financial, and market competition issues rather than pension plan valuation or termination compliance requirements.