IRS Updates Rates Used in DB Plan Funding Calculations

March 4, 2010 ( – The Internal Revenue Service has issued Notice 2010-24, updating weighted average interest rates, yield curves, and segment rates used in funding calculations for defined benefit retirement plans.

The rates are used for calculations such as liabilities, required contributions, and funding targets.

Notice 2010-24 provides guidance as to the corporate bond weighted average interest rate and the permissible range of interest rates specified under § 412(b)(5)(B)(ii)(II) of the Internal Revenue Code.

It also provides guidance on the corporate bond monthly yield curve (and the corresponding spot segment rates), the 24-month average segment rates, and the funding transitional segment rates under § 430(h)(2). 

In addition, the notice provides guidance as to the interest rate on 30-year Treasury securities under § 417(e)(3)(A)(ii)(II) as in effect for plan years beginning before 2008, and the minimum present value segment rates under § 417(e)(3)(D) as in effect for plan years beginning after 2007.

Notice 2010-24 is here.