Notice 2026-38

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, 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 May 2026

data is in Table 2026-5 at the end of this notice. The spot first, second, and third segment rates for the month of May 2026 are, respectively, 4.42, 5.47, and 6.31.

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 2025 and 2026. 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 2025 and 2026 were published in Notice 2024-67, 2024-41 I.R.B. 726 and Notice 2025-47, 2025-40 I.R.B. 441, respectively.

24-MONTH AVERAGE CORPORATE BOND SEGMENT RATES

The three 24-month average corporate bond segment rates applicable for June 2026 without adjustment for the 25-year average segment rate limits are as follows:

24-Month Average Segment Rates Without 25-Year Average Adjustment Applicable Month First Segment Second Segment Third Segment June 2026 4.39 5.26 5.90

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 June 2026, 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), are as follows:

Adjusted 24-Month Average Segment Rates For Plan Years

Beginning In Applicable Month First Segment Second Segment Third Segment

2025 June 2026 4.75 5.26 5.90

2026 June 2026 4.75 5.25 5.90

30-YEAR TREASURY SECURITIES INTEREST RATES

Section 431 specifies the minimum funding requirements that apply to mul

tiemployer 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

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)).

July 6, 2026 30 Bulletin No. 2026–28

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 May 2026 is 5.03 percent. The Service determined this rate as the average of the daily determinations of yield on the 30-year Treasury bond maturing in February 2056 determined each day through May 12, 2026 and the yield on the 30-year Treasury bond

maturing in May 2056 determined each day for the balance of the month. For plan years beginning in June 2026, 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:

Treasury Weighted Average Rates For Plan Years Beginning In 30-Year Treasury Weighted Average Permissible Range 90% to 105%

June 2026 4.53 4.08 to 4.76

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 min

imum present value segment rates. Pursuant to that section, the minimum present value segment rates determined for May 2026 are as follows:

Minimum Present Value Segment Rates Month First Segment Second Segment Third Segment May 2026 4.42 5.47 6.31

DRAFTING INFORMATION

The principal author of this notice is Tom Morgan of the Office of Associ

ate 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 number).

Bulletin No. 2026–28 31 July 6, 2026

Table 2026-5 Monthly Yield Curve for May 2026

Derived from May 2026 Data

Maturity Yield Maturity Yield Maturity Yield Maturity Yield Maturity Yield 0.5 3.99 20.5 5.98 40.5 6.34 60.5 6.47 80.5 6.53 1.0 4.14 21.0 5.99 41.0 6.35 61.0 6.47 81.0 6.53 1.5 4.28 21.5 6.01 41.5 6.35 61.5 6.47 81.5 6.53 2.0 4.38 22.0 6.03 42.0 6.36 62.0 6.47 82.0 6.53 2.5 4.45 22.5 6.04 42.5 6.36 62.5 6.47 82.5 6.53 3.0 4.50 23.0 6.06 43.0 6.37 63.0 6.48 83.0 6.53 3.5 4.54 23.5 6.07 43.5 6.37 63.5 6.48 83.5 6.53 4.0 4.58 24.0 6.09 44.0 6.37 64.0 6.48 84.0 6.53 4.5 4.62 24.5 6.10 44.5 6.38 64.5 6.48 84.5 6.53 5.0 4.67 25.0 6.11 45.0 6.38 65.0 6.48 85.0 6.54 5.5 4.72 25.5 6.13 45.5 6.38 65.5 6.48 85.5 6.54 6.0 4.78 26.0 6.14 46.0 6.39 66.0 6.49 86.0 6.54 6.5 4.84 26.5 6.15 46.5 6.39 66.5 6.49 86.5 6.54 7.0 4.91 27.0 6.16 47.0 6.40 67.0 6.49 87.0 6.54 7.5 4.97 27.5 6.17 47.5 6.40 67.5 6.49 87.5 6.54 8.0 5.04 28.0 6.18 48.0 6.40 68.0 6.49 88.0 6.54 8.5 5.10 28.5 6.19 48.5 6.41 68.5 6.49 88.5 6.54 9.0 5.16 29.0 6.20 49.0 6.41 69.0 6.50 89.0 6.54 9.5 5.22 29.5 6.21 49.5 6.41 69.5 6.50 89.5 6.54 10.0 5.28 30.0 6.22 50.0 6.41 70.0 6.50 90.0 6.55 10.5 5.34 30.5 6.23 50.5 6.42 70.5 6.50 90.5 6.55 11.0 5.39 31.0 6.23 51.0 6.42 71.0 6.50 91.0 6.55 11.5 5.44 31.5 6.24 51.5 6.42 71.5 6.50 91.5 6.55 12.0 5.49 32.0 6.25 52.0 6.43 72.0 6.50 92.0 6.55 12.5 5.53 32.5 6.26 52.5 6.43 72.5 6.51 92.5 6.55 13.0 5.57 33.0 6.26 53.0 6.43 73.0 6.51 93.0 6.55 13.5 5.61 33.5 6.27 53.5 6.43 73.5 6.51 93.5 6.55 14.0 5.65 34.0 6.28 54.0 6.44 74.0 6.51 94.0 6.55 14.5 5.68 34.5 6.28 54.5 6.44 74.5 6.51 94.5 6.55 15.0 5.72 35.0 6.29 55.0 6.44 75.0 6.51 95.0 6.55 15.5 5.75 35.5 6.29 55.5 6.44 75.5 6.51 95.5 6.56 16.0 5.78 36.0 6.30 56.0 6.45 76.0 6.52 96.0 6.56 16.5 5.80 36.5 6.30 56.5 6.45 76.5 6.52 96.5 6.56 17.0 5.83 37.0 6.31 57.0 6.45 77.0 6.52 97.0 6.56 17.5 5.85 37.5 6.32 57.5 6.45 77.5 6.52 97.5 6.56 18.0 5.88 38.0 6.32 58.0 6.45 78.0 6.52 98.0 6.56 18.5 5.90 38.5 6.33 58.5 6.46 78.5 6.52 98.5 6.56 19.0 5.92 39.0 6.33 59.0 6.46 79.0 6.52 99.0 6.56 19.5 5.94 39.5 6.34 59.5 6.46 79.5 6.52 99.5 6.56 20.0 5.96 40.0 6.34 60.0 6.46 80.0 6.53 100.0 6.56

July 6, 2026 32 Bulletin No. 2026–28

December 31, 2017; (ii) the corporation was a qualified opportunity zone business (QOZB) (or newly organized for such purpose) at the time the stock was issued; and (iii) for 90 percent of the QOF’s holding period of such stock, the corporation qualified as a QOZB. See prior §§ 1400Z-2(d) (2)(B) and 1.1400Z2(d)-1(c)(2)(i). Effective for stock acquired after December 31, 2026, § 70421(c)(4)(B) of the OBBBA modified § 1400Z-2(d)(2)(B)(i)(I) by replacing “December 31, 2017,” with “applicable date,” which, as defined in § 1400Z-2(d)(2)(E), means, with respect to any corporation that is a QOZB, the earliest applicable start date with respect to the QOZBP held by such QOZB. See paragraph (5) of this subsection for the definition of “applicable start date.”

(b) Qualified opportunity zone part- nership interest . Effective for partnership interests acquired on or before December 31, 2026, prior § 1400Z-2(d)(2)(C) and the regulations thereunder define QOZ partnership interest as any capital or profits interest in a domestic partnership where: (i) the interest was acquired by a QOF from the partnership solely in exchange for cash after December 31, 2017; (ii) the partnership was a QOZB (or newly formed for such purpose) at the time the interest was acquired; and (iii) for 90 percent of the QOF’s holding period of such interest, the partnership qualified as a QOZB. See prior § 1400Z-2(d)(2)(C) and § 1.1400Z2(d)-1(c)(3)(i). Effective for partnership interests acquired after December 31, 2026, § 70421(c)(4)(B) of the OBBBA modified § 1400Z-2(d) (2)(C)(i) by replacing “December 31, 2017,” with “applicable date” as defined in § 1400Z-2(d)(2)(E). Under § 1400Z2(d)(2)(E), “applicable date” means, with respect to any partnership that is a QOZB, the earliest applicable start date with respect to the QOZBP held by such QOZB.

(c) Qualified opportunity zone business property . Effective for property acquired on or before December 31, 2026, prior § 1400Z-2(d)(2)(D) defines QOZBP as tangible property used in a trade or business of the QOF if (i) such property was acquired by the QOF by purchase after

Transitional Guidance on Qualified Opportunity Zones under §§ 1400Z-1 and 1400Z-2