This article pertains to looking up segment rates and spot rates for computing minimum lump sum present values under the Pension Protection Act of 2006 (PPA), as amended (where applicable) by the Moving Ahead for Progress in the 21st Century Act (MAP-21) using ProAdmin’s Administration Factors Tool.  

Selecting either the Variable rate with Input is spot rates option or the Segment-style rates option makes the PPA rates... button accessible. Depending on which option has been selected, clicking the PPA rates... button accesses the “Look up PPA corporate bond yield curve” dialog box or the “Look up Minimum lump sum segment rates”  dialog box, respectively.

The “Look up PPA corporate bond yield curve” dialog box furnishes a list, according to the Year and Month that the curve rates are Applicable for, of the historical full spot yield curves. Each row displays, for Illustrative mid-year durations 0.5, 1.5, 2.5, 3.5, 10.5, 20.5 and 30.5, the yield (or spot rate) applicable for the month for (mid-year) maturities of 0.5, 1.5, 2.5, 3.5, 10.5, 20.5 and 30.5, respectively. ProAdmin ignores the yields applicable for beginning-of-year maturities (1.0, 2.0, 3.0, etc.). (Regarding the data underlying the spot rates, note that, for example, the maturities ProAdmin displays as applicable for the month of January 2010 are from Table I of Notice 2010-14, “Monthly Yield Curve Derived For December 2009 Derived from December 2009 Data”.)  Click the row corresponding to the calendar month for which you wish to look up the applicable yield curve and then click the Paste button; ProAdmin will paste 100 values, corresponding to the yields (applicable for that month) at maturities of 0.5, 1.5, 2.5, 3.5, …10.5, …, 20.5, …, 30.5, … 98.5 and 99.5, into the Variable Rate From/Up to grid. The yields at maturities of 0.5, 1.5, 2.5, 3.5, …, 10.5, …, 20.5, …, 30.5, … 98.5 and 99.5 will be pasted into the text fields for values at the durations 0, 1, 2, 3, …, 10, …, 20, …, 30, …, 98 and 99, respectively, shown in the From column of the grid for the Variable Rate parameter. 

The “Look up Minimum lump sum segment rates”  dialog box lists, for computing minimum lump sum present values under Internal Revenue Code Section 417(e)(3), by calendar Year and Month, the Current Month Rate for each of the three segments.  Each row displays, the First Segment, Second Segment and Third Segment rates applicable for the month and selected plan year. For months prior to January 2012, rates displayed reflect the transition rule of PPA that blends segment rates with the (pre-PPA) GATT rate basis.  Accordingly, the months and plan years shown vary depending on your choice at the bottom of the dialog as to for which plan year to Blend GATT rates and PPA rates assuming a plan year beginning in. Click the row corresponding to the calendar month for which you wish to look up the current month rates and then click the Paste button; ProAdmin will paste the three segment rates applicable for that month into the Interest Rates dialog box. 

For guidance, see Internal Revenue Service pronouncements, including Notices 2007-81.  https://www.irs.gov/Retirement-Plans/Minimum-Present-Value-Segment-Rates

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