Rule2023-26238
Allocation of Assets in Single-Employer Plans; Valuation of Benefits and Assets; Expected Retirement Age
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
November 29, 2023
Effective
January 1, 2024
Issuing agencies
Pension Benefit Guaranty Corporation
Abstract
This rule amends the Pension Benefit Guaranty Corporation's regulation on Allocation of Assets in Single-Employer Plans by substituting a new table for determining expected retirement ages for participants in pension plans undergoing distress or involuntary termination with valuation dates falling in 2024. This table is needed to compute the value of early retirement benefits and, thus, the total value of benefits under a plan.
Full Text
<html>
<head>
<title>Federal Register, Volume 88 Issue 228 (Wednesday, November 29, 2023)</title>
</head>
<body><pre>
[Federal Register Volume 88, Number 228 (Wednesday, November 29, 2023)]
[Rules and Regulations]
[Pages 83352-83353]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-26238]
=======================================================================
-----------------------------------------------------------------------
PENSION BENEFIT GUARANTY CORPORATION
29 CFR Part 4044
Allocation of Assets in Single-Employer Plans; Valuation of
Benefits and Assets; Expected Retirement Age
AGENCY: Pension Benefit Guaranty Corporation.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: This rule amends the Pension Benefit Guaranty Corporation's
regulation on Allocation of Assets in Single-Employer Plans by
substituting a new table for determining expected retirement ages for
participants in pension plans undergoing distress or involuntary
termination with valuation dates falling in 2024. This table is needed
to compute the value of early retirement benefits and, thus, the total
value of benefits under a plan.
DATES: This rule is effective January 1, 2024.
FOR FURTHER INFORMATION CONTACT: Hilary Duke (<a href="/cdn-cgi/l/email-protection#3f5b4a545a115756535e4d467f4f5d585c11585049"><span class="__cf_email__" data-cfemail="c7a3b2aca2e9afaeaba6b5be87b7a5a0a4e9a0a8b1">[email protected]</span></a>),
Assistant General Counsel for Regulatory Affairs, Office of the General
Counsel, Pension Benefit Guaranty Corporation, 445 12th Street SW,
Washington, DC 20024-2101, 202-229-3839. If you are deaf or hard of
hearing, or have a speech disability, please dial 7-1-1 to access
telecommunications relay services.
SUPPLEMENTARY INFORMATION: The Pension Benefit Guaranty Corporation
(PBGC) administers the pension plan termination insurance program under
title IV of the Employee Retirement Income Security Act of 1974
(ERISA). PBGC's regulation on Allocation of Assets in Single-Employer
Plans (29 CFR part 4044) sets forth (in subpart B) the methods for
valuing plan benefits of terminating single-employer plans covered
under title IV. Guaranteed benefits and benefit liabilities under a
plan that is undergoing a distress termination must be valued in
accordance with subpart B of part 4044. In addition, when PBGC
terminates an underfunded plan involuntarily pursuant to ERISA section
4042(a), it uses the subpart B valuation rules to determine the amount
of the plan's underfunding.
Under Sec. 4044.51(b) of the asset allocation regulation, early
retirement benefits are valued based on the annuity starting date, if a
retirement date has been selected, or the expected retirement age, if
the annuity starting date is not known on the valuation date. Sections
4044.55 through 4044.57 set forth rules for determining the expected
[[Page 83353]]
retirement ages for plan participants entitled to early retirement
benefits. Appendix D of part 4044 contains tables to be used in
determining the expected early retirement ages.
Table I in appendix D (Selection of Retirement Rate Category) is
used to determine whether a participant has a low, medium, or high
probability of retiring early. The determination is based on the year a
participant would reach ``unreduced retirement age'' (URA) (i.e., the
earlier of the normal retirement age or the age at which an unreduced
benefit is first payable) and the participant's monthly benefit at the
unreduced retirement age. The table applies only to plans with
valuation dates in the current year and is updated annually by PBGC to
reflect changes in the cost of living.
Tables II-A, II-B, and II-C (Expected Retirement Ages for
Individuals in the Low, Medium, and High Categories respectively) are
used to determine the expected retirement age after the probability of
early retirement has been determined using table I. These tables
establish, by probability category, the expected retirement age based
on both the earliest age a participant could retire under the plan and
the unreduced retirement age. This expected retirement age is used to
compute the value of the early retirement benefit and, thus, the total
value of benefits under the plan.
This document amends appendix D to replace table I-23 with table I-
24 to provide an updated correlation, appropriate for calendar year
2024, between the amount of a participant's benefit and the probability
that the participant will elect early retirement. Table I-24 will be
used to value benefits in plans with valuation dates during calendar
year 2024.
PBGC has determined that notice of, and public comment on, this
rule are impracticable, unnecessary, and contrary to the public
interest. PBGC's update of appendix D for calendar year 2024 is
routine. If a plan has a valuation date in 2024, the plan administrator
needs the updated table being promulgated in this rule to value
benefits. Accordingly, PBGC finds that the public interest is best
served by issuing this table expeditiously, without an opportunity for
notice and comment, and that good cause exists for making the table set
forth in this amendment effective less than 30 days after publication
to allow the use of the proper table to estimate the value of plan
benefits for plans with valuation dates in early 2024.
PBGC has determined that this action is not a ``significant
regulatory action'' under the criteria set forth in Executive Order
12866.
Because no general notice of proposed rulemaking is required for
this regulation, the Regulatory Flexibility Act of 1980 does not apply
(5 U.S.C. 601(2)).
List of Subjects in 29 CFR Part 4044
Employee benefit plans, Pension insurance.
In consideration of the foregoing, 29 CFR part 4044 is amended as
follows:
PART 4044--ALLOCATION OF ASSETS IN SINGLE-EMPLOYER PLANS
0
1. The authority citation for part 4044 continues to read as follows:
Authority: 29 U.S.C. 1301(a), 1302(b)(3), 1341, 1344, 1362.
0
2. Appendix D to part 4044 is amended by removing table I-23 and adding
in its place table I-24 to read as follows:
Appendix D to Part 4044--Tables Used To Determine Expected Retirement
Age
Table I-24--Selection of Retirement Rate Category
[For valuation dates in 2024 \1\]
----------------------------------------------------------------------------------------------------------------
Participant's retirement rate category is--
---------------------------------------------------- High \4\ if monthly
Medium \3\ if monthly benefit benefit at URA is
If participant reaches URA in year-- Low \2\ if monthly at URA is-- greater than--
benefit at URA is --------------------------------
less than-- From-- To--
----------------------------------------------------------------------------------------------------------------
2025................................... 802 802 3,388 3,388
2026................................... 821 821 3,466 3,466
2027................................... 839 839 3,546 3,546
2028................................... 859 859 3,627 3,627
2029................................... 879 879 3,711 3,711
2030................................... 899 899 3,796 3,796
2031................................... 919 919 3,883 3,883
2032................................... 941 941 3,973 3,973
2033................................... 962 962 4,064 4,064
2034 or later.......................... 984 984 4,157 4,157
----------------------------------------------------------------------------------------------------------------
\1\ Applicable tables for valuation dates before 2024 are available on PBGC's website (<a href="http://www.pbgc.gov">www.pbgc.gov</a>).
\2\ Table II-A.
\3\ Table II-B.
\4\ Table II-C.
* * * * *
Issued in Washington, DC.
Hilary Duke,
Assistant General Counsel for Regulatory Affairs, Pension Benefit
Guaranty Corporation.
[FR Doc. 2023-26238 Filed 11-28-23; 8:45 am]
BILLING CODE 7709-02-P
</pre><script data-cfasync="false" src="/cdn-cgi/scripts/5c5dd728/cloudflare-static/email-decode.min.js"></script></body>
</html>Indexed from Federal Register on November 29, 2023.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.