Practitioners
PBGC January 2017 Interest Rate Summary
January 19, 2017
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In response to feedback from practitioners and plan participants, PBGC reorganized and enhanced the material included in this monthly summary. PBGC welcomes additional feedback and requests that feedback on this summary be sent to viener.amy@pbgc.gov. |
The purpose of this summary is to provide, in one place, a summary of current interest rates that relate to various calculations required under Title IV of ERISA. PBGC posts this summary each month, as soon as all of the new information is available.
Rate-specific webpages containing additional information about and historical data for each type of rate included in this summary are available via PBGC's interest rates webpage.
Rates that change each month
Description | What rate is used for | Most current | When rate is used |
ERISA 4022 Lump Sum Interest Rates
| These interest rates are used to determine the lump sum equivalent of a participant's benefit when PBGC trustees a single-employer plan. If the value is less than $5,000, PBGC may pay that amount in one lump sum in lieu of a monthly annuity. Some ongoing pension plans use these rates to determine lump sum amounts, but the vast majority do not. Individuals seeking information about the interest rates their plans use to determine lump sums should contact their plan directly. |
The ERISA 4022 Lump Sum Interest Rate Web page provides information about how these rates are used, e.g., what i1, i2, i3, n1 and n2 represent, when to use the immediate rate, etc. |
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| These rates, the spot segment rates, are used to determine the variable-rate premium (VRP) unless the plan has an election in effect to use the Alternative Premium Funding Target. These rates are determined and published by the IRS.
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| These are the December 2016 spot segment rates. They are used by plans with plan years beginning in January 2017 for determining either the 2017 or 2018 VRP, depending on whether the plan uses the "lookback rule". The VRP interest rate web page provides additional information about applicability. |
Rates that change each calendar quarter
Because the rates shown below change quarterly, the rates shown below are identical to what was shown in last month's summary. Updated information will be included in the March 2017 Interest Rate Summary.
Description | What rate is used for | Most current | When rate is used |
| These rates are used for determining the present value of accrued benefits on a termination basis. |
| January 1, 2017 through |
| PBGC charges interest on late PBGC premiums using the IRC section 6601(a) rate (i.e., what IRS charges for late tax payments). Late payment penalties may also apply. See Late Payment Charges for more information. The same rates are also used to compute certain interest charges applicable when PBGC trustees a plan (e.g., interest on required contributions unpaid as of the termination date). | 4% | Interest accrued |
| Unless rules adopted by the plan provide otherwise, this is the rate of interest multiemployer plans:
| 3.75% | Interest charged or credited January 1, 2017 through |
