PBGC Issues Yield Curve for ERISA 4044 Calculations

The Pension Benefit Guaranty Corporation (PBGC) has released its first yield curve issued for ERISA 4044 calculations where the valuation date is on or after July 31, 2024, and before August 31, 2024.  PBGC’s ERISA 4044 regulation provides guidance on the actuarial assumptions used to determine the present value of benefits in involuntary and distress terminations of single-employer plans (e.g., interest, mortality, retirement age), and for other purposes. PBGC will update the Interest Assumption webpage monthly to reflect future yield curves.

PBGC previously issued a final rule that changes the structure of the interest assumption from the select and ultimate approach to a yield curve approach. PBGC notes that the “4044 yield curve,” 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.