Treasury Releases Rates for Calculating Required Pension Funding

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The Treasury Department and IRS issue guidance (Notice 2012-55) on 25-year average segment rates and adjusted 24-month average segment rates, numbers that actuaries will use to advise single-employer defined benefit plan sponsors on their minimum funding obligations. Provisions authorizing the new rates were included in transportation funding legislation signed by President Obama July 6 after a lobbying effort by employers. The mandatory rates, under Section 40211 of the Moving Ahead for Progress in the 21st Century Act (Pub. L. No. 112-141), provide short-term relief to plan sponsors facing higher-than-usual pension contributions for the next few years because of historically low interest rates.

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