IRS Releases Final Regulation for Methodology for Determining Present Value for DB Plans

The Department of the Treasury (Treasury) and the Internal Revenue Service (IRS) issued final regulations specifying the methodology for using the corporate bond yield curve to determine the interest rates used in calculating present value and for making other calculations for defined benefit plans. These regulations affect participants in, beneficiaries of, employers maintaining, and administrators of certain retirement plans, as well as insurance companies.These regulations apply for determining the corporate bond yield curve under section 430(h)(2)(D) of the Internal Revenue Code (IRC) for months that begin on or after February 1, 2024.

The final rule is effective January 12 2024.