Tax News

CCH (cch.taxgroup.com) reports:

The Treasury Department and the IRS have released guidance on the current corporate bond yield curve and related segment rates, as well as the methodology for determining the rates, for the purpose of establishing a plan's funding target under Code Sec. 430(h)(2). The Treasury Department, Pursuant to the Pension Protection Act of 2006 (P.L. 109-280) (PPA), is to produce a yield curve and simplified segment rates for investment-quality corporate bonds for the purpose of assisting private pension plans in determining their funding obligations and lump-sum payouts to participants. As required by the PPA, monthly updates to the rates will be released.
For plans electing not to use the transitional rule under Code Sec. 430(h)(2)(G), or for plans whose first year begins after 2007, the 24-month average segments rates for September of 2007 are: 5.26 for the first segment; 5.82 for the second segment; and, 6.38 for the third segment.
For plan years beginning in 2008, the funding transitional segment rates, taking into account the corporate bond weighted average of 5.86, for September 2007 are: 5.66 for the first segment; 5.85 for the second segment; and, 6.03 for the third segment.
For plan years beginning in 2008, the minimum present value transitional segment rates for August 2007, taking into account the 30-year Treasury rate of 4.93, are: 5.02 for the first segment; 5.18 for the second segment; and, 5.28 for the third segment.
IR-2007-167, 2007FED ¶46,661
Treasury Department News Release TDNR HP-594, 2007FED ¶46,662
Notice 2007-81, 2007FED ¶46,663
Other References:
Code Sec. 417
CCH Reference - 2007FED ¶17,730.40
Code Sec. 430
CCH Reference - 2007FED ¶20,161.30
Tax Research Consultant
CCH Reference - TRC RETIRE: 15,304.15