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Interest Rate Tables

The table below shows relevant interest rate tables affecting worplace retirement plans. Except where indicated, the rates shown are for the most recent 12-month period.

Benchmark interest rates for certain defined benefit plan calculations

The rates below are used for various funding calculations under IRC §430 and for distribution calculations under IRC §417(e).

  • 30-year Treasury rate [For rates for other months, see https://www.irs.gov/retirement-plans/weighted-average-interest-rate-table]
    • February 2020: 1.97%
    • March 2020: 1.46%
    • April 2020: 1.27%
    • May 2020: 1.38%
    • June 2020: 1.49%
    • July 2020: 1.31%
    • August 2020: 1.36%
    • September 2020: 1.42%
    • October 2020: 1.57%
    • November 2020: 1.62%
    • December 2020: 1.67%
    • January 2021: 1.82%
  • Corporate bond yield curve segment rates for target normal cost and funding target calculations [see the Adjusted 24-month Average Rates below for the adjusted rates after application of the 25-year average stablization rule under IRC §430(h)(2)(C)(iv)] [For rates for other months, see https://www.irs.gov/retirement-plans/funding-yield-curve-segment-rates]
    • March 2020: 24-month average segment rate - 2.71% (1st segment), 3.75% (2nd segment), 4.21% (3rd segment)
    • April 2020: 24-month average segment rate - 2.68% (1st segment), 3.71% (2nd segment), 4.19% (3rd segment)
    • May 2020: 24-month average segment rate - 2.62% (1st segment), 3.66% (2nd segment), 4.14% (3rd segment)
    • June 2020: 24-month average segment rate - 2.54% (1st segment), 3.61% (2nd segment), 4.09% (3rd segmentt)
    • July 2020: 24-month average segment rate - 2.44% (1st segment), 3.54% (2nd segment), 4.04% (3rd segment)
    • August 2020: 24-month average segment rate - 2.33% (1st segment), 3.46% (2nd segment), 3.98% (3rd segment)
    • September 2020: 24-month average segment rate - 2.22% (1st segment), 3.38% (2nd segment), 3.92% (3rd segment)
    • October 2020: 24-month average segment rate - 2.11% (1st segment), 3.30% (2nd segment), 3.86% (3rd segment)
    • November 2020: 24-month average segment rate - 1.99% (1st segment), 3.21% (2nd segment), 3.80% (3rd segment)
    • December 2020: 24-month average segment rate - 1.87% (1st segment), 3.12% (2nd segment), 3.72% (3rd segment)
    • January 2021: 24-month average segment rate - 1.75% (1st segment), 3.04% (2nd segment), 3.65% (3rd segment)
    • February 2021: 24-month average segment rate - 1.64% (1st segment), 2.96% (2nd segment), 3.59% (3rd segment)
  • Monthly Spot Segment Rates [For rates for other months, see https://www.irs.gov/retirement-plans/minimum-present-value-segment-rates]
    • February 2020: 1.73% (1st segment), 2.72% (2nd segment), 3.35% (3rd segment)
    • March 2020: 2.22% (1st segment), 3.08% (2nd segment), 3.73% (3rd segment)
    • April 2020: 1.58% (1st segment), 2.88% (2nd segment),3.24% (3rd segment)
    • May 2020: 1.08% (1st segment), 2.78% (2nd segment),3.47% (3rd segment)
    • June 2020: 0.74% (1st segment), 2.57% (2nd segment),3.32% (3rd segment)
    • July 2020: 0.59% (1st segment), 2.25% (2nd segment),3.01% (3rd segment)
    • August 2020: 0.52% (1st segment), 2.22% (2nd segment),3.03% (3rd segment)
    • September 2020: 0.51% (1st segment), 2.31% (2nd segment),3.15% (3rd segment)
    • October 2020: 0.54% (1st segment), 2.38% (2nd segment),3.28% (3rd segment)
    • November 2020: 0.53% (1st segment), 2.31% (2nd segment),3.09% (3rd segment)
    • December 2020: 0.51% (1st segment), 2.26% (2nd segment),3.01% (3rd segment)
    • January 2021: 0.50% (1st segment), 2.38% (2nd segment),3.17% (3rd segment)
  • Adjusted 24-month average segment rates to reflect segment rate stabilization rule under IRC §430(h)(2)(C)(iv) [Plan years beginning before 2021 reflect 90% of the 25-year average segment rates, and For plan years beginning in 2021 reflect 85% of the 25-year average segment rates, as required by IRC §430(h)(2)(C)(iv).]
    Use of these percentages: Where the
    segment rate stabilization rule applies (e.g., determining minimum funding obligations under IRC §430), if the 24-month yield curve segment rates are less than the rate below for the year in which the plan year begins, substitute the adjusted segment rates shown below.The stablized rates for 2017-2020 are 90% of the average of the first, second, and third segment rates, respectively, for the 25-year period ending on September 30 of the preceding calendar year.
    • Rates for plan years beginning in 2017: 4.16% (1st segment), 5.72% (2nd segment), 6.48% (3rd segment)
    • Rates for plan years beginning in 2018: 3.92% (1st segment), 5.52% (2nd segment), 6.29% (3rd segment)
    • Rates for plan years beginning in 2019: 3.74% (1st segment), 5.35% (2nd segment), 6.11% (3rd segment)
    • Rates for plan years beginning in 2020: 3.64% (1st segment), 5.21% (2nd segment), 5.94% (3rd segment)
    • Rates for plan years beginning in 2021: 3.32% (1st segment), 4.79% (2nd segment), 5.47% (3rd segment)
  • Minimum present value segment rates for plan years beginning in 2013 and subsequent plan years [The applicable interest rates under § 417(e)(3)(D) are segment rates computed without regard to a 24-month average, and correspond to the spot segment rates described above][For rates for other months, see https://www.irs.gov/retirement-plans/minimum-present-value-segment-rates]
    • February 2020: 1.73% (1st segment), 2.72% (2nd segment), 3.35% (3rd segment)
    • March 2020: 2.22% (1st segment), 3.08% (2nd segment), 3.73% (3rd segment)
    • April 2020: 1.58% (1st segment), 2.88% (2nd segment),3.24% (3rd segment)
    • May 2020: 1.08% (1st segment), 2.78% (2nd segment),3.47% (3rd segment)
    • June 2020: 0.74% (1st segment), 2.57% (2nd segment),3.32% (3rd segment)
    • July 2020: 0.59% (1st segment), 2.25% (2nd segment),3.01% (3rd segment)
    • August 2020: 0.52% (1st segment), 2.22% (2nd segment),3.03% (3rd segment)
    • September 2020: 0.51% (1st segment), 2.31% (2nd segment),3.15% (3rd segment)
    • October 2020: 0.54% (1st segment), 2.38% (2nd segment),3.28% (3rd segment)
    • November 2020: 0.53% (1st segment), 2.31% (2nd segment),3.09% (3rd segment)
    • December 2020: 0.51% (1st segment), 2.26% (2nd segment),3.01% (3rd segment)
    • January 2021: 0.50% (1st segment), 2.38% (2nd segment),3.17% (3rd segment)

Applicable Federal Mid-Term Rates[Note: The applicable federal mid-term rate is determined pursuant to IRC §1274. For retirement plans, 120% of this rate is used to calculate accumulated mandatory contributions under a DB plan (IRC §411(c)(2)(C)), 150% of this rate is used to calculate the amortization payments on a waived funding deficiency, unless the plan's interest assumption is greater (IRC §412(d)), 175% of this rate is used to determine charges against the funding standard account for missed quarterly installment payments, unless the plan's interest assumption is greater (IRC §412(m))] [For rates for other months, see https://apps.irs.gov/app/picklist/list/federalRates.html]

  • March 2020: 1.53%, 1.83% (120%), 2.29% (150%), 2.68% (175%)
  • April 2020: 0.99%, 1.19% (120%), 1.50% (150%), 1.74% (175%)
  • May 2020: 0.58%, 0.70% (120%), 0.87% (150%), 1.02% (175%)
  • June 2020: 0.43%, 0.52% (120%), 0.65% (150%), 0.75% (175%)
  • July 2020: 0.45%, 0.54% (120%), 0.68% (150%), 0.79% (175%)
  • August 2020: 0.41%, 0.49% (120%), 0.62% (150%), 0.72% (175%)
  • September 2020: 0.35%, 0.42% (120%), 0.53% (150%), 0.61% (175%)
  • October 2020: 0.38%, 0.46% (120%), 0.57% (150%), 0.67% (175%)
  • November 2020: 0.39%, 0.47% (120%), 0.59% (150%), 0.68% (175%)
  • December 2020: 0.48%, 0.58% (120%), 0.72% (150%), 0.84% (175%)
  • January 2021: 0.52%, 0.62% (120%), 0.78% (150%), 0.91% (175%)
  • February 2021: 0.56%, 0.67% (120%), 0.84% (150%), 0.98% (175%)
  • March 2021: 0.62%, 0.74% (120%), 0.93% (150%), 1.09% (175%)

Quarterly interest rate charges for underpayment of federal taxes (IRC §6621(a)(2)) [Note: The DOL uses these rates to calculate Lost Earnings under its Voluntary Fiduciary Compliance Program. The PBGC uses these rates to calculate interest charges on late premium payments.] [For rates for other quarters, see https://www.dol.gov/agencies/ebsa/employers-and-advisers/plan-administration-and-compliance/correction-programs/vfcp/table-of-underpayment-rates]

  • Third quarter 2020: 3%
  • Fourth quarter 2020: 3%
  • First quarter 2021: 3%
  • Second quarter 2021: 3%

PBGC Interest Rates To Compute Lump Sums for Private-Sector Plans [For rates for other months [For rates for other months, see https://www.pbgc.gov/prac/interest/vls]

Comment: The rates provided below are the PBGC interest rates for computing lump sum distributions. The immediate annuity rate is used to determine present value at normal retirement age or early retirement age. The 3 deferred annuity rates apply to discount the present value for years prior to such age: the first tier rate applies to the first 7 years preceding such age, the second tier rate applies to the next 8 years preceding such age, and the third tier rate applies to additional years. Starting with January 2021, the PBGC is no longer using this interest rate methodology to value de minimis lump sum benefits under PBGC-trusteed plans. Instead, it is adopting the IRC §417(e)(3) applicable rates. However, since some plans refer to the PBGC rates, where it is the “legacy methodology” that is intended to be used, revised Appendix C of Part 4022, as published by the PBGC in the Federal Register on September 9, 2020 (85 F.R. 55587), provides a table for determining these legacy rates. The PBGC will not publish the post-2020 legacy rates at its website, but continues to post its legacy rates from 1993-2020 - - see https://www.pbgc.gov/prac/interest/vls. The legacy rate table in revised Appendix C lists the immediate, first tier, second tier and third tier rates based on the applicable 12-year corporate bond yield curve under IRC §430(h)(2)(D)(ii) for a 12-month bond maturity for the second month preceding the month for which the rates are being determined. This rate appears in an Appendix to the IRS’ monthly rate tables .For rates shown below for January 2021 and later, we include a reference to the 12-year applicable rate and the IRS notice in which that appears. Note that under the legacy rate metholody in effect after December 2020, the immediate rate will not be greater than 0% until the 12-year applicable rate is 3.18% or higher, the first tier rate will be at 4% until the 12-year applicable rate is above 7.64%, and the second tier rate will be at 4% until the 12-year applicable rate is above 8.82%. The third tier rate is permanently set at 4% under the revised legacy rate methodology.

  • April 2020: 0.00%, First Tier - 4.00%, Second Tier - 4.00%, Third Tier - 4.00%
  • May 2020: 0.50%, First Tier - 4.00%, Second Tier - 4.00%, Third Tier - 4.00%
  • June 2020: 0.00%, First Tier - 4.00%, Second Tier - 4.00%, Third Tier - 4.00%
  • July 2020: 0.00%, First Tier - 4.00%, Second Tier - 4.00%, Third Tier - 4.00%
  • August 2020: 0.00%, First Tier - 4.00%, Second Tier - 4.00%, Third Tier - 4.00%
  • September 2020: 0.00%, First Tier - 4.00%, Second Tier - 4.00%, Third Tier - 4.00%
  • October 2020: 0.00%, First Tier - 4.00%, Second Tier - 4.00%, Third Tier - 4.00%
  • November 2020: 0.00%, First Tier - 4.00%, Second Tier - 4.00%, Third Tier - 4.00%
  • December 2020: 0.00%, First Tier - 4.00%, Second Tier - 4.00%, Third Tier - 4.00%
  • January 2021: 0.00%, First Tier - 4.00%, Second Tier - 4.00%, Third Tier - 4.00%
  • February 2021: 0.00%, First Tier - 4.00%, Second Tier - 4.00%, Third Tier - 4.00%
  • March 2021: 0.00%, First Tier - 4.00%, Second Tier - 4.00%, Third Tier - 4.00%

Spot segment rates for VRP calculations in post-2007 plan years [Note: These rates are based on the spot segment rates that would be used for minimum funding purposes, using such rates in effect for the month preceding the month in which the plan year begins; the 24-month average segment rates (shown above) apply instead to planes that elect to use an alternative premium funding target to determine unfunded benefits for VRP calculations] [For rates for other months, see https://www.pbgc.gov/prac/interest/vrp]

  • March 2020: 1.73% (1st segment), 2.72% (2nd segment), 3.35% (3rd segment)
  • April 2020: 2.22% (1st segment), 3.08% (2nd segment), 3.73% (3rd segment)
  • May 2020: 1.58% (1st segment), 2.88% (2nd segment),3.24% (3rd segment)
  • June 2020: 1.08% (1st segment), 2.78% (2nd segment),3.47% (3rd segment)
  • July 2020: 0.74% (1st segment), 2.57% (2nd segment),3.32% (3rd segment)
  • August 2020: 0.59% (1st segment), 2.25% (2nd segment),3.01% (3rd segment)
  • September 2020: 0.52% (1st segment), 2.22% (2nd segment),3.03% (3rd segment)
  • October 2020: 0.51% (1st segment), 2.31% (2nd segment),3.15% (3rd segment)
  • November 2020: 0.54% (1st segment), 2.38% (2nd segment),3.28% (3rd segment)
  • December 2020: 0.53% (1st segment), 2.31% (2nd segment),3.09% (3rd segment)
  • January 2021: 0.51% (1st segment), 2.26% (2nd segment),3.01% (3rd segment)
  • February 2021: 0.50% (1st segment), 2.38% (2nd segment),3.17% (3rd segment)

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