PBGC Hikes Interest Rate Assumptions for Failing Pensions

The federal government’s private-sector pension insurer is changing the interest rates used to value benefits when a corporate plan terminates.

The Pension Benefit Guaranty Corporation published a final rule Tuesday setting interest rate assumptions at 2.81% on the first 20 years following a valuation date—a 0.41% increase over the last quarterly assumptions. Interest rate assumptions after 20 years of the valuation date will be set at 2.94%, an 0.82% hike.

The rates will take effect on July 1 and remain in effect until the end of September.