PPA Interest Rates

[FAPInJax]

The IRS is now releasing the interest rates for target liability and PVAB minimum lump sums for PPA. Has there been anything released with respect to PBGC (since they supposedly are using a different composition for their interest rates)??

[SoCalActuary]

PBGC will be using a snapshot of the December rates, which are not yet in existence since there have been no trades in December 2007 at the time of this writing.

[FAPInJax]

Thanks.

I guess the better question would have been - are the rates going to be same for PBGC versus lump sum rates? Someone had posted a comment a while ago that the PBGC was looking at a different set of bonds for their interest rates than the IRS was using for lump sums (therefore, creating a third set of interest segments).

[SoCalActuary]

417e rates will be plan specific, in that the document specifies a look-back period of up to 5 months.

My read on PBGC rules is that the basic three-tier values for December 2007 will be the rates used for the variable premium calc on January 2008.

Further, the 417e rates have a four year phase-in, which was not in the PBGC rates to my recollection.