Updated October 30, 2026. Quick answer: The IRS segment rates for September 2026 are 5.06% (first segment), 5.99% (second) and 6.72% (third), from IRS Notice 2026-65. They are the minimum present value rates under section 417(e)(3), published monthly in an IRS notice. The IRS table had not yet listed September 2026 on October 30, 2026; August 2026, the newest month on that table, was 4.65%, 5.75% and 6.73%.
Month by month: October 2025, November 2025, December 2025, January 2026, February 2026, March 2026, April 2026, May 2026, June 2026, July 2026, August 2026, September 2026, October 2026 and November 2026.
Segment rates by month, January 2025 to September 2026
| Month | First segment | Second segment | Third segment |
|---|---|---|---|
| September 2026 | 5.06% | 5.99% | 6.72% |
| August 2026 | 4.65% | 5.75% | 6.73% |
| July 2026 | 4.62% | 5.62% | 6.51% |
| June 2026 | 4.49% | 5.43% | 6.18% |
| May 2026 | 4.42% | 5.47% | 6.31% |
| April 2026 | 4.27% | 5.34% | 6.22% |
| March 2026 | 4.24% | 5.35% | 6.25% |
| February 2026 | 3.96% | 5.15% | 6.11% |
| January 2026 | 4.03% | 5.20% | 6.12% |
| December 2025 | 4.03% | 5.17% | 6.11% |
| November 2025 | 4.07% | 5.15% | 6.01% |
| October 2025 | 4.01% | 5.04% | 5.83% |
| September 2025 | 4.06% | 5.12% | 5.93% |
| August 2025 | 4.20% | 5.29% | 6.08% |
| July 2025 | 4.38% | 5.41% | 6.13% |
| June 2025 | 4.43% | 5.46% | 6.13% |
| May 2025 | 4.50% | 5.57% | 6.23% |
| April 2025 | 4.51% | 5.49% | 6.07% |
| March 2025 | 4.50% | 5.33% | 5.86% |
| February 2025 | 4.65% | 5.38% | 5.81% |
| January 2025 | 4.74% | 5.55% | 5.92% |
The IRS page introduces the table: “For plan years beginning in the stated year, the following rates are the applicable interest rates for the month and year listed for minimum present value computations under Section 417(e)(3)(D) of the Code.” Notice 2026-65 gives the newest month: “The spot first, second, and third segment rates for the month of September 2026 are, respectively, 5.06, 5.99, and 6.72.”
How August 2026 compares with a year earlier
The August 2025 rates were 4.20%, 5.29% and 6.08%. Against August 2026, the first segment is up 0.45 points, the second up 0.46 and the third up 0.65 (computed from the table). The segment rates are not fixed for a year: they change every month.
Which month’s rates apply to a lump sum
Section 417(e)(3) defines the applicable interest rate as the adjusted first, second and third segment rates “for the month before the date of the distribution or such other time as the Secretary may by regulations prescribe”. The statute calls the rates “the first, second, and third segment rates which would be determined under section 430(h)(2)(C)” with the monthly average yield used in place of the 24-month average. The IRS page says the same thing in its own words: “segment rates computed without regard to a 24-month average”. Your plan document names which month it uses, so ask your plan administrator before comparing an offer with this table. The mechanism is explained on how interest rates change a pension lump sum.
Why a higher rate lowers a lump sum
The statute says the present value “shall not be less than the present value calculated by using the applicable mortality table and the applicable interest rate”. Discounting a stream of future payments at a higher rate gives a smaller present value; that is arithmetic, not a quotation from the statute. So, other things equal, a distribution priced in a month with higher segment rates produces a smaller minimum lump sum than the same distribution priced when the rates were lower. Your plan may pay more than the minimum, and the mortality table, your age and the form of benefit also move the figure.
The funding rates in the same notice are different numbers
Notice 2026-65 also carries “24-month average segment rates” for plan funding under section 430(h)(2). Those are not the rates in the table above: the table is the spot (single-month) series used for minimum present value.
Common mistakes
- Using the 24-month average funding rates in Notice 2026-65 as if they were the lump sum rates.
- Assuming the latest month’s rates are the ones your plan used. Your plan names its own month.
- Treating these as the rate your plan pays. They set a minimum present value, and a plan may pay more.
Related: how interest rates change a pension lump sum, the lump sum break-even method, and the pension buyout questions.
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Answer againSources
- IRS, Minimum present value segment rates: https://www.irs.gov/retirement-plans/minimum-present-value-segment-rates
- IRS Notice 2026-65, update for weighted average interest rates, yield curves and segment rates: https://www.irs.gov/pub/irs-drop/n-26-65.pdf
- 26 U.S.C. 417, definitions and special rules for purposes of minimum survivor annuity requirements (GovInfo): https://www.govinfo.gov/link/uscode/26/417
Sources: the primary documents linked above, read on October 1, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer, the plan administrator or the agency itself is the right place to confirm anything consequential.