Compliance News | June 11, 2024

PBGC Finalizes Revised Actuarial Assumptions

The PBGC has issued a final rule updating the valuation assumptions provided under ERISA Section 4044 (4044 interest rate assumptions), which are used to determine how a single-employer plan’s assets are allocated based on PBGC rules.

The new rule is effective for valuation dates on or after July 31, 2024.

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The assumptions under Section 4044 also have applicability for other purposes, such as for reporting for single-employer plans under ERISA Section 4010.

Sponsors of multiemployer plans should be aware that the assumptions affect multiemployer mass withdrawal liability calculations and withdrawal liability calculations for multiemployer plans after receipt of Special Financial Assistance (SFA) under the PBGC’s final rule on SFA.

The final rule

The key updates provided by the final rule, which was published in the June 6, 2024 Federal Register, include:

  • Modernizing the interest-rate assumption to use a yield-curve approach based on current market interest rates
  • Updating to a more current mortality assumption
  • Simplifying the expense assumption

The final regulation is substantially the same as the proposed regulation published last August, which we discussed in our August 31, 2023 insight.

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This page is for informational purposes only and does not constitute legal, tax or investment advice. You are encouraged to discuss the issues raised here with your legal, tax and other advisors before determining how the issues apply to your specific situations.