FAQ 977: Segment Rates - HATFA/BBA15/ARP21

Problem: Can the system handle PPA valuations using HATFA, BBA15, or ARP21 segment rates?

Solution: Since the introduction of the Pension Protection Act (PPA), the following law changes affected funding segment rates in the following ways: - The Highway and Transportation Funding Act of 2014 (HATFA) extended the MAP-21 corridor ranges applied to segment rates used for minimum funding calculations. Under HATFA, the 10% corridor was set to expire in 2017 and grade in to 30% (in 5% increments) starting in 2021. - The Bipartisan Budget Act of 2015 (BBA15) kept the 10% corridor in place until 2019 and delayed the widening of the corridor until 2020. The corridor was scheduled to reach 30% in 2023. - The American Rescue Plan Act of 2021 (ARP21) sets the 5% corridor for years 2020 to 2025, then applies the 10% corridor in 2026, 15% corridor in 2027, etc. The corridor is now scheduled to reach 30% in 2029. In addition, a 5% floor on the 25-year average used to determine the tiered segment rates was introduced. Locating Segment Rates Patches are the preferred method for updating the ASC valuation system for the most recently published segment rates under the applicable laws in effect. In addition, users can download the monthly yieldcurveandsegmentrate.zip file from the Client Support Center. The HATFA/BBA15/ARP21 rates are included along with the MAP-21, 417(e), PBGC and other monthly rates. Selecting Segment Rates in Plan Specifications On the Funding > PPAFASMP screen, the Min lookup feature works in the following ways for the different law changes: - The system will look up the HATFA segment rates for plan years beginning in 2014. For plan years beginning in 2013, plan sponsors may opt out of using HATFA rates, and the lookup feature allows users to choose from either the MAP-21 rates (old corridor) or HATFA rates (required corridor). - The system will look up the BBA15 rates for plan years beginning after 2017. The BBA15 rates will no longer be published or referenced in the system for plan years beginning after 12/31/2021. - The system will look up the ARP21 rates for plan years beginning in 2020. For plan years beginning in 2020 and 2021, the lookup feature will show both BBA15 and ARP21 rates due to the plan sponsor option to elect to continue to use BBA15 rates for those plan years. Reporting The Certification Letter and AFTAP Certification report pages in the PPA Valuation report have been updated to refer to ARP21 for plan years beginning in 2020 and later if the ARP21 minimum funding segment rates have been selected.