PBGC Final Rule on Asset Allocation Interest Assumptions

Content

ACTION:

Final rule.

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 January 31, 2026-April 29, 2026. These interest assumptions are used for valuing benefits under terminating single-employer
plans and for other purposes.

DATES:

Effective January 31, 2026.

FOR FURTHER INFORMATION CONTACT:

Jose Singer-Freeman (singer-freeman.jose@pbgc.gov), Attorney, Regulatory Affairs Division, Office of the General Counsel, Pension Benefit Guaranty Corporation, 445 12th Street
SW, Washington, DC 20024-2101, 202-229-5432. If you are deaf or hard of hearing, or have a speech

     disability, please dial 7-1-1 to access telecommunications relay services.

SUPPLEMENTARY INFORMATION:

PBGC's regulation on Allocation of Assets in Single-Employer Plans (29 CFR part 4044) prescribes actuarial assumptions—including
an interest assumption—for valuing benefits under terminating single-employer plans covered by title IV of the Employee Retirement
Income Security Act of 1974 (ERISA). The interest assumption is also posted on PBGC's website (www.pbgc.gov).

PBGC uses the interest assumption in § 4044.54 to determine the present value of annuities in an involuntary or distress termination
of a single-employer plan under the asset allocation regulation. The assumptions in part 4044 of PBGC's regulations are also
used in other situations where it is appropriate for liabilities to align with private sector group annuity prices. For example,
PBGC's regulations on Notice, Collection, and Redetermination of Withdrawal Liability (29 CFR part 4219) and Duties of Plan
Sponsor Following Mass Withdrawal (29 CFR part 4281) provide that these assumptions are used to value liabilities for purposes
of determining withdrawn employers' reallocation liability in the event of a mass withdrawal from a multiemployer plan. Multiemployer
plans that receive special financial assistance under the regulation on Special Financial Assistance by PBGC (29 CFR part
4262) must, as a condition of receiving special financial assistance, use the interest assumption to determine withdrawal
liability for a prescribed period. Additionally, plan sponsors are required to use some, or all of these assumptions for specified
purposes (e.g., reporting benefit liabilities in filings required under PBGC's regulation on Annual Financial and Actuarial Information Reporting
(29 CFR part 4010) or 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)) and
may use them for other purposes (e.g., to ensure that plan spinoffs comply with section 414(l) of the Internal Revenue Code).

Part 4044 of PBGC's regulations provides that the interest assumption for part 4044 purposes is a yield curve (i.e., the “4044 yield curve”) that 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. The adjustments are referred to as “spreads.”
PBGC determines and publishes spreads quarterly based on survey data on pricing of private-sector group annuities. PBGC posts
the 4044 yield curve on its website at www.pbgc.gov each month shortly after its underlying data become available. In addition, practitioners are able to determine the 4044 yield
curve as of the end of any month using the publicly available bond yield curves and the spreads specified in the regulation.

This rule amends the regulation to specify the spreads used to determine the 4044 yield curve as of the last days of January,
February, and March of 2026 (i.e., the “first quarter 2026 spreads”). Due to space constraints, table 1 to paragraph (e) shows spreads only for the most recent
four quarters. Historical spreads are available on www.pbgc.gov, along with more recent spreads.

Need for Immediate Guidance

PBGC has determined that notice of, and public comment on, this rule are impracticable, unnecessary, and contrary to the public
interest. PBGC routinely updates the spreads component of the interest assumption in the asset allocation regulation so that
the 4044 yield curve may be determined as soon as the underlying bond yield curves become available. These amendments are
merely technical; they ensure that use of PBGC's interest assumption continues to yield liabilities in line with group annuity
prices. Accordingly, PBGC finds that the public interest is best served by issuing this rule expeditiously, without an opportunity
for notice and comment, and that good cause exists for making the assumptions set forth in this amendment effective less than
30 days after publication.

PBGC has determined that this action is not a “significant regulatory action” under the criteria set forth in Executive Order
12866.

Because no general notice of proposed rulemaking is required for this amendment, the Regulatory Flexibility Act of 1980 does
not apply. See 5 U.S.C. 601(2).

List of Subjects in 29 CFR Part 4044

Employee benefit plans, Pension insurance, Pensions.

For the reasons stated in the preamble, PBGC amends 29 CFR part 4044 as follows.

PART 4044—ALLOCATION OF ASSETS IN SINGLE-EMPLOYER PLANS

Regulatory Text 1. The authority citation for part 4044 continues to read as follows:

Authority:

29 U.S.C. 1301(a), 1302(b)(3), 1341, 1344, 1362.

1. In § 4044.54, revise table 1 to paragraph (e) to read as follows:

§ 4044.54 Interest assumptions.

(e) * * *

| Maturity point | Second quarter
2025 spreads(percent) | Third quarter
2025 spreads(percent) | Fourth quarter
2025 spreads(percent) | First quarter
2026 spreads(percent) |
| --- | --- | --- | --- | --- |
| 0.5 | 0.38 | 0.40 | 0.49 | 0.56 |
| 1.0 | 0.38 | 0.40 | 0.49 | 0.56 |
| 1.5 | 0.37 | 0.40 | 0.49 | 0.56 |
| 2.0 | 0.37 | 0.40 | 0.49 | 0.56 |
| 2.5 | 0.37 | 0.40 | 0.49 | 0.55 |
| 3.0 | 0.37 | 0.40 | 0.49 | 0.55 |
| 3.5 | 0.37 | 0.39 | 0.48 | 0.54 |
| 4.0 | 0.37 | 0.39 | 0.48 | 0.54 |
| 4.5 | 0.37 | 0.39 | 0.47 | 0.53 |
| 5.0 | 0.37 | 0.39 | 0.47 | 0.53 |
| 5.5 | 0.36 | 0.38 | 0.46 | 0.52 |
| 6.0 | 0.36 | 0.38 | 0.46 | 0.52 |
| 6.5 | 0.35 | 0.37 | 0.44 | 0.50 |
| 7.0 | 0.35 | 0.37 | 0.44 | 0.50 |
| 7.5 | 0.35 | 0.36 | 0.43 | 0.48 |
| 8.0 | 0.35 | 0.36 | 0.43 | 0.48 |
| 8.5 | 0.34 | 0.34 | 0.41 | 0.45 |
| 9.0 | 0.34 | 0.34 | 0.41 | 0.45 |
| 9.5 | 0.33 | 0.33 | 0.39 | 0.43 |
| 10.0 | 0.33 | 0.33 | 0.39 | 0.43 |
| 10.5 | 0.32 | 0.32 | 0.37 | 0.40 |
| 11.0 | 0.32 | 0.32 | 0.37 | 0.40 |
| 11.5 | 0.32 | 0.30 | 0.34 | 0.37 |
| 12.0 | 0.32 | 0.30 | 0.34 | 0.37 |
| 12.5 | 0.31 | 0.28 | 0.32 | 0.34 |
| 13.0 | 0.31 | 0.28 | 0.32 | 0.34 |
| 13.5 | 0.30 | 0.27 | 0.30 | 0.31 |
| 14.0 | 0.30 | 0.27 | 0.30 | 0.31 |
| 14.5 | 0.29 | 0.25 | 0.27 | 0.28 |
| 15.0 | 0.29 | 0.25 | 0.27 | 0.28 |
| 15.5 | 0.28 | 0.24 | 0.25 | 0.25 |
| 16.0 | 0.28 | 0.24 | 0.25 | 0.25 |
| 16.5 | 0.27 | 0.22 | 0.23 | 0.22 |
| 17.0 | 0.27 | 0.22 | 0.23 | 0.22 |
| 17.5 | 0.26 | 0.20 | 0.20 | 0.19 |
| 18.0 | 0.26 | 0.20 | 0.20 | 0.19 |
| 18.5 | 0.25 | 0.19 | 0.18 | 0.16 |
| 19.0 | 0.25 | 0.19 | 0.18 | 0.16 |
| 19.5 | 0.24 | 0.17 | 0.16 | 0.13 |
| 20.0 | 0.24 | 0.17 | 0.16 | 0.13 |
| 20.5 | 0.23 | 0.16 | 0.14 | 0.11 |
| 21.0 | 0.23 | 0.16 | 0.14 | 0.11 |
| 21.5 | 0.22 | 0.14 | 0.12 | 0.08 |
| 22.0 | 0.22 | 0.14 | 0.12 | 0.08 |
| 22.5 | 0.22 | 0.13 | 0.10 | 0.06 |
| 23.0 | 0.22 | 0.13 | 0.10 | 0.06 |
| 23.5 | 0.21 | 0.12 | 0.08 | 0.04 |
| 24.0 | 0.21 | 0.12 | 0.08 | 0.04 |
| 24.5 | 0.20 | 0.11 | 0.07 | 0.02 |
| 25.0 | 0.20 | 0.11 | 0.07 | 0.02 |
| 25.5 | 0.20 | 0.10 | 0.06 | 0.00 |
| 26.0 | 0.20 | 0.10 | 0.06 | 0.00 |
| 26.5 | 0.20 | 0.09 | 0.05 | −0.01 |
| 27.0 | 0.20 | 0.09 | 0.05 | −0.01 |
| 27.5 | 0.19 | 0.09 | 0.04 | −0.02 |
| 28.0 | 0.19 | 0.09 | 0.04 | −0.02 |
| 28.5 | 0.19 | 0.09 | 0.03 | −0.03 |
| 29.0 | 0.19 | 0.09 | 0.03 | −0.03 |
| 29.5 | 0.19 | 0.09 | 0.03 | −0.03 |
| 30.0 | 0.19 | 0.09 | 0.03 | −0.03 |
Joseph Krettek, Assistant General Counsel, Pension Benefit Guaranty Corporation. [FR Doc. 2026-00909 Filed 1-16-26; 8:45 am] BILLING CODE 7709-02-P

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