The IRS publishes segment rates once a month in a numbered notice in the Internal Revenue Bulletin. Each notice reports yields observed during the prior calendar month, so a notice released in March carries February data. The IRS does not commit to a fixed calendar day, and the release can shift by a week or more from month to month. The fastest way to catch each one is the IRS’s recent interest rate notices page, which lists every new notice as soon as it appears.1Internal Revenue Service. Recent Interest Rate Notices
The Monthly Cycle and the One-Month Lag
The legal basis for the monthly cycle is Notice 2007-81, which sets out how the IRS derives the corporate bond yield curve and segment rates that Section 430(h)(2)(F) of the Internal Revenue Code requires the Secretary of the Treasury to publish each month.2Internal Revenue Service. Notice 2007-81 The lag exists because the IRS needs a full month of market data before it can calculate and certify the figures. You will not see rates for the current month during the current month; you will see them after it closes.
Because publication drifts within the month, checking on a calendar schedule is less reliable than watching the notices page directly. If you are timing a decision around a specific month’s rates, plan for the release to land anywhere from early to late in the following month.
Where to Find the Rates on IRS.gov
Three IRS pages carry the numbers, and knowing which one you need saves time:
- The minimum present value segment rates page lists the monthly spot rates used to determine the minimum value of a lump-sum distribution under Section 417(e)(3).3Internal Revenue Service. Minimum Present Value Segment Rates
- The pension plan funding segment rates page publishes the 24-month average segment rates, the stabilization corridors, and the adjusted rates employers use for plan funding under Section 430.4Internal Revenue Service. Pension Plan Funding Segment Rates
- The historical funding segment rate tables page archives rates back to 2007, organized into tables covering 24-month averages and transitional rates for earlier plan years.5Internal Revenue Service. Historical Funding Segment Rate Tables
The notices themselves are published in the Internal Revenue Bulletin, which is the official federal record. The recent interest rate notices page links to each notice’s PDF as it posts.1Internal Revenue Service. Recent Interest Rate Notices Data is available in both PDF and spreadsheet formats, so you can pull the numbers straight into a calculator without working from a third-party summary.
What Each Notice Contains
Every monthly notice reports three segment rates, tiered by when the plan expects to make payments:
- The first segment covers benefits payable within the first five years from the measurement date.
- The second segment covers benefits payable between five and twenty years out.
- The third segment covers benefits payable more than twenty years into the future.
Each rate is derived from the Treasury Department’s high-quality corporate bond yield curve, which tracks returns on investment-grade private debt across maturities.4Internal Revenue Service. Pension Plan Funding Segment Rates Alongside the monthly spot rates, each notice also carries 24-month average segment rates, which smooth short-term swings and are used mainly for plan funding rather than for individual lump-sum payouts.
Funding Rates vs. Lump-Sum Rates
The IRS publishes segment rates for two distinct purposes, and mixing them up leads to badly wrong estimates.
Funding segment rates under IRC Section 430 determine how much an employer must contribute to keep the pension plan adequately funded. They use the 24-month average of bond yields and sit inside stabilization rules that hold them within a corridor of 95% to 105% of 25-year historical averages for plan years beginning in 2020 through 2030.6Office of the Law Revision Counsel. 26 USC 430 – Minimum Funding Standards for Single-Employer Defined Benefit Pension Plans Those guardrails keep employer contribution requirements from swinging wildly.
Lump-sum segment rates under IRC Section 417(e)(3) determine the minimum present value of your benefit if you elect a lump-sum distribution. They use a single month’s yields and carry no stabilization corridor.7Federal Register. Update to Minimum Present Value Requirements for Defined Benefit Plan Distributions The result is that lump-sum rates move more sharply with the bond market than funding rates do. When people talk about rates rising and lump sums dropping, they mean the Section 417(e)(3) rates. Higher segment rates produce smaller lump sums, and lower rates produce larger ones, because a higher assumed return means the plan needs less money today to fund the same future payments. The swing can be significant: a couple of percentage points can reduce a payout by 30% to 40% depending on age and benefit structure.
Which Month’s Rates Apply to Your Payout
Your plan does not necessarily use the rates from the month you retire. Treasury regulations give each plan two levers to lock in which month’s notice controls the calculation: a stability period and a lookback month.
The stability period is the window during which one set of rates applies to all distributions. It can run from a single calendar month up to a full calendar year. Many large plans use a calendar year, meaning everyone who retires during that year uses the same rates.8Internal Revenue Service. Private Letter Ruling 201803006
The lookback month is the specific month whose rates the plan pulls in for that stability period. The regulations let a plan choose the first, second, third, fourth, or fifth full calendar month before the stability period begins.9eCFR. 26 CFR 1.417(e)-1 – Restrictions and Valuations of Distributions from Plans in Which the Present Value Exceeds $5,000 A plan with a calendar-year stability period and a fourth-month lookback would use September rates from the prior year for every distribution in the current year.
So the notice you need to watch is not always the one that just came out. Check your plan’s summary plan description for its stability period and lookback month. That one detail tells you exactly which IRS notice controls your number, and it may already have been published months before you retire.
If Your Number Does Not Match
If your plan’s lump-sum offer does not match what you calculate from the published rates, ask the plan administrator in writing for three specifics: the stability period, the lookback month, and the mortality table used. Most gaps between a participant’s estimate and the plan’s offer trace back to one of those three inputs rather than an arithmetic error. Once you have them, you can pull the correct month’s notice from the recent interest rate notices page and rerun the math against the same assumptions the plan actually applied.