n-25-17.pdf

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Part III --- Administrative, Miscellaneous, and Procedural
Update for Weighted Average Interest Rates, Yield Curves, and Segment Rates

Notice 2025-17

This notice provides guidance on the corporate bond monthly yield curve, the
corresponding spot segment rates used under § 417(e)(3), and the 24-month average segment
rates under § 430(h)(2) of the Internal Revenue Code. In addition, this notice provides guidance
as to the interest rate on 30-year Treasury securities under § 417(e)(3)(A)(ii)(II) as in effect for
plan years beginning before 2008 and the 30-year Treasury weighted average rate under
§ 431(c)(6)(E)(ii)(I).

YIELD CURVE AND SEGMENT RATES

Section 430 specifies the minimum funding requirements that apply to single-employer
plans (except for CSEC plans under § 414(y)) pursuant to § 412. Section 430(h)(2) specifies the
interest rates that must be used to determine a plan’s target normal cost and funding target.
Under this provision, present value is generally determined using three 24-month average
interest rates (“segment rates”), each of which applies to cash flows during specified periods. To
the extent provided under § 430(h)(2)(C)(iv), these segment rates are adjusted by the applicable
percentage of the 25-year average segment rates for the period ending September 30 of the
year preceding the calendar year in which the plan year begins.
1
However, an election may be
made under § 430(h)(2)(D)(ii) to use the monthly yield curve in place of the segment rates.

Section 1.430(h)(2)-1(d) provides rules for determining the monthly corporate bond yield
curve,
2
and § 1.430(h)(2)-1(c) provides rules for determining the 24-month average corporate
bond segment rates used to compute the target normal cost and the funding target. Consistent
with the methodology specified in § 1.430(h)(2)-1(d), the monthly corporate bond yield curve
derived from February 2025 data is in Table 2025-2 at the end of this notice. The spot first,
second, and third segment rates for the month of February 2025 are, respectively, 4.65, 5.38,
and 5.81.

The 24-month average segment rates determined under § 430(h)(2)(C)(i) through (iii)
must be adjusted pursuant to § 430(h)(2)(C)(iv) to be within the applicable minimum and
maximum percentages of the corresponding 25-year average segment rates. Those
percentages are 95% and 105% for plan years beginning in 2024 and 2025. For this purpose,
any 25-year average segment rate that is less than 5% is deemed to be 5%. The 25-year
average segment rates for plan years beginning in 2024 and 2025 were published in Notice
2023-66, 2023-40 I.R.B. 992 and Notice 2024-67, 2024-41 I.R.B. 726, respectively.

1
Pursuant to § 433(h)(3)(A), the third segment rate determined under § 430(h)(2)(C) is used to determine
the current liability of a CSEC plan (which is used to calculate the minimum amount of the full funding
limitation under § 433(c)(7)(C)).
2
For months before February 2024, the monthly corporate bond yield curve was determined in
accordance with Notice 2007-81, 2007-44 I.R.B. 899. Section 1.430(h)(2)-1(d) generally adopts the
methodology for determining the monthly corporate bond yield curve under Notice 2007-81 but includes
two enhancements to take into account subsequent changes in the bond market. Those enhancements
are described in the preamble to TD 9986 (89 FR 2127).

2

24-MONTH AVERAGE CORPORATE BOND SEGMENT RATES

The three 24-month average corporate bond segment rates applicable for March 2025
without adjustment for the 25-year average segment rate limits are as follows:

The adjusted 24-month average segment rates set forth in the chart below reflect §
430(h)(2)(C)(iv) of the Code. The 24-month averages applicable for March 2025, adjusted to be
within the applicable minimum and maximum percentages of the corresponding 25-year
average segment rates in accordance with § 430(h)(2)(C)(iv) of the Code, are as follows:

30-YEAR TREASURY SECURITIES INTEREST RATES

Section 431 specifies the minimum funding requirements that apply to multiemployer
plans pursuant to § 412. Section 431(c)(6)(B) specifies a minimum amount for the full-funding
limitation described in § 431(c)(6)(A), based on the plan’s current liability. Section
431(c)(6)(E)(ii)(I) provides that the interest rate used to calculate current liability for this purpose
must be no more than 5 percent above and no more than 10 percent below the weighted
average of the rates of interest on 30-year Treasury securities during the four-year period
ending on the last day before the beginning of the plan year. Notice 88-73, 1988-2 C.B. 383,
provides guidelines for determining the weighted average interest rate. The rate of interest on
30-year Treasury securities for February 2025 is 4.68 percent. The Service determined this rate
as the average of the daily determinations of yield on the 30-year Treasury bond maturing in
November 2054 determined each day through February 12, 2025 and the yield on the 30-year
Treasury bond maturing in February 2055 determined each day for the balance of the month.
For plan years beginning in March 2025, the weighted average of the rates of interest on 30-
year Treasury securities and the permissible range of rates used to calculate current liability are
as follows:

24-Month Average Segment Rates Without 25-Year Average Adjustment

Applicable Month First Segment Second Segment Third Segment
March 2025 4.99 5.30 5.48
Treasury Weighted Average Rates

For Plan Years 30-Year Treasury Permissible Range
Beginning In Weighted Average 90% to 105%
March 2025 3.93 3.54 to 4.13

Adjusted 24-Month Average Segment Rates
For Plan Years First Second Third
Beginning In Applicable Month Segment Segment Segment
2024 March 2025 4.99 5.30 5.59
2025 March 2025 4.99 5.30 5.50

3

MINIMUM PRESENT VALUE SEGMENT RATES

In general, the applicable interest rates under § 417(e)(3)(D) are segment rates
computed without regard to a 24-month average. Section 1.417(e)-1(d)(3) provides guidelines
for determining the minimum present value segment rates. Pursuant to that section, the
minimum present value segment rates determined for February 2025 are as follows:

DRAFTING INFORMATION

The principal author of this notice is Tom Morgan of the Office of Associate Chief
Counsel (Employee Benefits, Exempt Organizations, and Employment Taxes). However, other
personnel from the IRS participated in the development of this guidance. For further information
regarding this notice, contact Mr. Morgan at 202-317-6700 or Tony Montanaro at 626-927-1475
(not toll-free calls).

Month First Segment Second Segment Third Segment
February 2025 4.65 5.38 5.81

4

Table 2025-2

Monthly Yield Curve for February 2025
Derived from February 2025 Data
Maturity Yield

Maturity Yield

Maturity Yield

Maturity Yield

Maturity Yield
0.5 4.50

20.5 5.68

40.5 5.82

60.5 5.88

80.5 5.91
1.0 4.53

21.0 5.69

41.0 5.83

61.0 5.88

81.0 5.91
1.5 4.56

21.5 5.69

41.5 5.83

61.5 5.88

81.5 5.91
2.0 4.59

22.0 5.70

42.0 5.83

62.0 5.88

82.0 5.91
2.5 4.63

22.5 5.70

42.5 5.83

62.5 5.88

82.5 5.91
3.0 4.66

23.0 5.71

43.0 5.83

63.0 5.88

83.0 5.91
3.5 4.69

23.5 5.71

43.5 5.84

63.5 5.88

83.5 5.91
4.0 4.73

24.0 5.72

44.0 5.84

64.0 5.89

84.0 5.91
4.5 4.77

24.5 5.72

44.5 5.84

64.5 5.89

84.5 5.91
5.0 4.81

25.0 5.73

45.0 5.84

65.0 5.89

85.0 5.91
5.5 4.86

25.5 5.73

45.5 5.84

65.5 5.89

85.5 5.91
6.0 4.91

26.0 5.74

46.0 5.84

66.0 5.89

86.0 5.91
6.5 4.96

26.5 5.74

46.5 5.85

66.5 5.89

86.5 5.91
7.0 5.01

27.0 5.74

47.0 5.85

67.0 5.89

87.0 5.91
7.5 5.06

27.5 5.75

47.5 5.85

67.5 5.89

87.5 5.91
8.0 5.11

28.0 5.75

48.0 5.85

68.0 5.89

88.0 5.91
8.5 5.15

28.5 5.75

48.5 5.85

68.5 5.89

88.5 5.92
9.0 5.20

29.0 5.76

49.0 5.85

69.0 5.89

89.0 5.92
9.5 5.24

29.5 5.76

49.5 5.85

69.5 5.89

89.5 5.92
10.0 5.28

30.0 5.77

50.0 5.86

70.0 5.89

90.0 5.92
10.5 5.32

30.5 5.77

50.5 5.86

70.5 5.90

90.5 5.92
11.0 5.35

31.0 5.77

51.0 5.86

71.0 5.90

91.0 5.92
11.5 5.39

31.5 5.78

51.5 5.86

71.5 5.90

91.5 5.92
12.0 5.42

32.0 5.78

52.0 5.86

72.0 5.90

92.0 5.92
12.5 5.44

32.5 5.78

52.5 5.86

72.5 5.90

92.5 5.92
13.0 5.47

33.0 5.79

53.0 5.86

73.0 5.90

93.0 5.92
13.5 5.49

33.5 5.79

53.5 5.86

73.5 5.90

93.5 5.92
14.0 5.51

34.0 5.79

54.0 5.87

74.0 5.90

94.0 5.92
14.5 5.53

34.5 5.80

54.5 5.87

74.5 5.90

94.5 5.92
15.0 5.55

35.0 5.80

55.0 5.87

75.0 5.90

95.0 5.92
15.5 5.57

35.5 5.80

55.5 5.87

75.5 5.90

95.5 5.92
16.0 5.58

36.0 5.80

56.0 5.87

76.0 5.90

96.0 5.92
16.5 5.60

36.5 5.81

56.5 5.87

76.5 5.90

96.5 5.92
17.0 5.61

37.0 5.81

57.0 5.87

77.0 5.90

97.0 5.92
17.5 5.62

37.5 5.81

57.5 5.87

77.5 5.90

97.5 5.92
18.0 5.63

38.0 5.81

58.0 5.87

78.0 5.90

98.0 5.92
18.5 5.64

38.5 5.82

58.5 5.88

78.5 5.91

98.5 5.92
19.0 5.65

39.0 5.82

59.0 5.88

79.0 5.91

99.0 5.92
19.5 5.66

39.5 5.82

59.5 5.88

79.5 5.91

99.5 5.92
20.0 5.67

40.0 5.82

60.0 5.88

80.0 5.91

100.0 5.92