The “Look up current liability rates” dialog box furnishes a list, according to the year and month that the plan year begins in, of historical permissible interest rates (that apply to a valuation performed to determine liabilities for a plan year beginning in the listed month) for all current liabilities calculated on the RPA ’94 basis.

The following statutory and regulatory RPA ’94 interest rates are displayed:

• The lowest rate and highest rate in the permissible range is furnished, including the basis, i.e., whether the investment security used to derive the rates is corporate bonds or 30 year Treasury bonds (or the Treasury bond substitute utilized for some months). The basis displayed is corporate bonds for calendar months in 2004 through 2007. Either corporate or 30 year Treasury bond rates are displayed, at the user’s option, for calendar months in 2001, 2002 and 2003. The basis displayed is Treasury bonds for calendar months in 2000 and earlier years and for calendar months in 2008 and later years.

• For calendar months in 2004 and 2005, the maximum contrib. rate, i.e., the lowest rate in the permissible range determined under the 30 year Treasury bond basis, is also furnished. This interest rate may, perhaps (as noted in the discussion of Current Liability dialog box parameters), be used to calculate RPA ’94 current liability for the maximum tax deductible contribution, in lieu of the same interest rate as for calculation of current liability for the minimum required contribution. Note that, because ProVal presumes that the largest possible tax deductible contribution amount is desired, it is presumed that the user would select the lowest rate in the 30 year Treasury permissible range; hence that rate is displayed. Although ProVal does not display for months in 2004 and 2005 the highest rate in the permissible range for the 30 year Treasury basis, the American Academy of Actuaries publishes monthly the upper and lower limits of that, “old law”, current liability interest rate range.

The basis for 2001-2003 parameter lets you choose between the Corporate and the 30-year Treasury basis options for display of statutory/regulatory current liability interest rates for the calendar months of 2001, 2002 and 2003. Thus, for example, if you are performing a valuation as of 1/1/2003 and wish to see the RPA ’94 current liability interest rates that were published for January 1, 2003 (under the law prior to PFEA), you would select the 30-year Treasury basis option. On the other hand, for example, if you are recalculating liabilities as of January 1, 2003 for purposes of the January 1, 2004 valuation under PFEA, presumably, you wish to display interest rates on the corporate basis.

When you click the row corresponding to the calendar month for which you wish to look up interest rates, ProVal displays the highest rate permissible, for that month, in the RPA ’94 current liability interest rate text field (located below the interest rate list). The full range (lowest rate to highest rate) for that month also appears, in parentheses, to the right of the text field. The gateway interest rate (highest allowable) and, for months in 2004 and 2005, max. contrib..interest rate (alternative), for that month, also appear, below the text field. You may type a different interest rate in the RPA ’94 interest rate text field, provided that the rate is within the permissible range defined by the lowest rate and highest rate columns. (If you type a rate less than the lowest rate shown for the month, ProVal will replace it with the lowest rate. If you type a rate greater than the highest rate shown for the month, ProVal will replace it with the highest rate.) Click the Paste button to paste this rate, as well as the gateway interest rate and (for months in 2004 and 2005) max. contrib..interest rate displayed below the RPA ’94 interest rate text field, into the Current Liability dialog box as values for the RPA ’94 current liability interest rate, gateway (highest allowable) interest rate and maximum contribution basis interest rate parameters, respectively.

Notes regarding RPA ’94 current liability interest rates on the 30 year Treasury basis for calendar months in 2001, 2002 and 2003:

The RPA ‘94 highest rate shown for months in 2002 and 2003 is the published rate per the law in effect at the time, the Job Creation and Worker Assistance Act of 2002 (JCWAA); i.e., the rate is 120% of the weighted average (typically referred to as 4/3/2/1 weighting) of the rates of interest on 30-year Treasury securities (bonds) for the 4-year period ending on the last day of the preceding month. Thus, the RPA ‘94 highest rate shown for January and February of 2002 is the published revised rate per JCWAA, 120% of the weighted average interest rate. Prior to JCWAA, the maximum rate for January and February of 2002 had been published as 6.00% and 5.98%, respectively, which rates are 105% of the weighted average of the interest rates.

The RPA ‘94 highest rate shown for months in 2001 is the published rate, 105% of the 4/3/2/1 weighted average of the rates of interest on 30-year Treasury bonds, not the maximum permissible rate under certain circumstances (see, in particular, IRC section 412(m)(7), pursuant to JCWAA) for re-computing RPA current liability for the plan year beginning in 2001 for purposes of determining the prior year minimum funding requirement in the calculation of required quarterly contributions for plan years beginning in 2002. For that purpose only, the rates may be based on 120%, instead of 105%, of the weighted average of interest rates, published as follows:

for plan years beginning in:
January	2001	0.0710
February	2001	0.0707
March	2001	0.0705
April	2001	0.0702
May	2001	0.0700
June	2001	0.0698
July	2001	0.0696
August	2001	0.0695
September	2001	0.0693
October	2001	0.0691
November	2001	0.0689
December	2001	0.0686

Conversely, as previously mentioned, the RPA ‘94 highest rate shown for months in 2003 is the published rate, 120% of the 4/3/2/1 weighted average of the rates of interest on 30-year Treasury bonds, not 105%, the maximum permissible rate for re-computing RPA current liability for the plan year beginning in 2003 for purposes of determining the prior year minimum funding requirement in the calculation of required quarterly contributions for plan years beginning in 2004 under the law in effect prior to PFEA. For that purpose, and only for calculations that do not apply PFEA, the rates are based on 105%, instead of 120%, of the weighted average of interest rates.