Rule2024-29105
Allocation of Assets in Single-Employer Plans; Valuation of Benefits and Assets; Expected Retirement Age; Missing Participants Mortality Assumption
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Published
December 20, 2024
Effective
January 1, 2025
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 2025. This table is needed to compute the value of early retirement benefits and, thus, the total value of benefits under a plan. This rule also provides the mortality assumption for use with PBGC's missing participants program for determination dates in 2025.
Full Text
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<title>Federal Register, Volume 89 Issue 245 (Friday, December 20, 2024)</title>
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[Federal Register Volume 89, Number 245 (Friday, December 20, 2024)]
[Rules and Regulations]
[Pages 104040-104043]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-29105]
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PENSION BENEFIT GUARANTY CORPORATION
29 CFR Part 4044
Allocation of Assets in Single-Employer Plans; Valuation of
Benefits and Assets; Expected Retirement Age; Missing Participants
Mortality Assumption
AGENCY: Pension Benefit Guaranty Corporation.
ACTION: Final rule.
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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 2025. This table is needed
to compute the value of early retirement benefits and, thus, the total
value of benefits under a plan. This rule also provides the mortality
assumption for use with PBGC's missing participants program for
determination dates in 2025.
DATES: This rule is effective January 1, 2025.
FOR FURTHER INFORMATION CONTACT: Hilary Duke (<a href="/cdn-cgi/l/email-protection#7612031d13581e1f1a17040f360614111558111900"><span class="__cf_email__" data-cfemail="0b6f7e606e256362676a79724b7b696c68256c647d">[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:
Background
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.
Expected Retirement Age Low, Medium, High Tables
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 4044.58 set forth rules for determining the expected
retirement ages for plan participants entitled to early retirement
benefits. Section 4044.58 contains tables to be used in determining the
expected early retirement ages.\1\
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\1\ In June 2024, PBGC issued a final rule at 89 FR 48291
updating the interest, mortality, and expense assumptions used to
determine the present value of a single-employer plan's benefits
when it terminates in a distress or involuntary termination. This
rule moved the expected retirement ages tables from Appendix D in
part 4044 to Sec. 4044.58.
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Table I to Sec. 4044.58 (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 Sec. 4044.58 to replace Table I-24 with Table
I-25 to provide an updated correlation, appropriate for calendar year
2025, between the amount of a participant's benefit and the probability
that the participant will elect early retirement. Table I-25 will be
used to value benefits in plans with valuation dates during calendar
year 2025.
Missing Participants Mortality Assumptions
PBGC's regulation on Missing Participants (29 CFR part 4050)
provides that the mortality assumption used to determine certain
amounts to be transferred on behalf of a missing participant from a
terminating defined benefit plan to PBGC is the mortality table in
Sec. 4044.53(h). The table currently provides the mortality assumption
only for benefit determination dates on July 31 \2\ and later in 2024.
This rule updates the table to provide the mortality assumption for
benefit determination dates in 2025.
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\2\ PBGC's June 2024 final rule does not apply to calculations
where the valuation date is before July 31, 2024.
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Compliance With Regulatory Requirements
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 Sec. 4044.58 and Sec. 4044.53(h) for
calendar year 2025 are routine. If a plan has a valuation date in 2025,
the plan administrator needs the updated table in
[[Page 104041]]
Sec. 4044.58 being promulgated in this rule to value benefits.
Similarly, if a plan is transferring amounts on behalf of missing
participants under part 4050, the plan administrator needs the updated
mortality table in Sec. 4044.53(h) for benefit determination dates in
2025. Accordingly, PBGC finds that the public interest is best served
by issuing these tables 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 tables to determine the value benefits
for dates in early 2025.
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
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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. Amend Sec. 4044.53 by revising table 4 to paragraph (h) to read as
follows:
Sec. 4044.53 Mortality assumptions.
* * * * *
(h) * * *
Table 4 to Paragraph (h)--Missing Participants Unisex Mortality Table
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Benefit determination Benefit determination
Age dates in 2024 dates in 2025
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0............................................................. 0.00207 0.00204
1............................................................. 0.00015 0.00014
2............................................................. 0.00010 0.00009
3............................................................. 0.00008 0.00007
4............................................................. 0.00006 0.00006
5............................................................. 0.00006 0.00005
6............................................................. 0.00005 0.00005
7............................................................. 0.00005 0.00005
8............................................................. 0.00004 0.00004
9............................................................. 0.00004 0.00004
10............................................................ 0.00004 0.00004
11............................................................ 0.00004 0.00004
12............................................................ 0.00005 0.00005
13............................................................ 0.00006 0.00006
14............................................................ 0.00008 0.00007
15............................................................ 0.00009 0.00009
16............................................................ 0.00010 0.00010
17............................................................ 0.00012 0.00012
18............................................................ 0.00014 0.00014
19............................................................ 0.00016 0.00015
20............................................................ 0.00016 0.00016
21............................................................ 0.00017 0.00016
22............................................................ 0.00017 0.00017
23............................................................ 0.00018 0.00018
24............................................................ 0.00019 0.00019
25............................................................ 0.00020 0.00019
26............................................................ 0.00021 0.00020
27............................................................ 0.00022 0.00021
28............................................................ 0.00023 0.00022
29............................................................ 0.00023 0.00023
30............................................................ 0.00025 0.00025
31............................................................ 0.00026 0.00026
32............................................................ 0.00028 0.00027
33............................................................ 0.00030 0.00030
34............................................................ 0.00032 0.00031
35............................................................ 0.00034 0.00034
36............................................................ 0.00036 0.00036
37............................................................ 0.00038 0.00038
38............................................................ 0.00040 0.00040
39............................................................ 0.00043 0.00042
40............................................................ 0.00044 0.00044
41............................................................ 0.00046 0.00045
42............................................................ 0.00048 0.00047
43............................................................ 0.00049 0.00049
44............................................................ 0.00052 0.00051
45............................................................ 0.00054 0.00053
46............................................................ 0.00058 0.00057
47............................................................ 0.00061 0.00060
48............................................................ 0.00065 0.00064
49............................................................ 0.00070 0.00069
50............................................................ 0.00076 0.00076
51............................................................ 0.00085 0.00084
[[Page 104042]]
52............................................................ 0.00095 0.00094
53............................................................ 0.00106 0.00105
54............................................................ 0.00120 0.00118
55............................................................ 0.00143 0.00141
56............................................................ 0.00177 0.00174
57............................................................ 0.00205 0.00202
58............................................................ 0.00239 0.00235
59............................................................ 0.00276 0.00273
60............................................................ 0.00321 0.00317
61............................................................ 0.00370 0.00365
62............................................................ 0.00441 0.00434
63............................................................ 0.00514 0.00507
64............................................................ 0.00577 0.00570
65............................................................ 0.00658 0.00650
66............................................................ 0.00748 0.00738
67............................................................ 0.00834 0.00823
68............................................................ 0.00928 0.00916
69............................................................ 0.01034 0.01021
70............................................................ 0.01155 0.01141
71............................................................ 0.01294 0.01278
72............................................................ 0.01452 0.01435
73............................................................ 0.01631 0.01611
74............................................................ 0.01837 0.01815
75............................................................ 0.02073 0.02049
76............................................................ 0.02345 0.02317
77............................................................ 0.02656 0.02626
78............................................................ 0.03012 0.02979
79............................................................ 0.03417 0.03382
80............................................................ 0.03899 0.03862
81............................................................ 0.04395 0.04356
82............................................................ 0.04959 0.04916
83............................................................ 0.05595 0.05549
84............................................................ 0.06317 0.06267
85............................................................ 0.07138 0.07083
86............................................................ 0.08063 0.08005
87............................................................ 0.09107 0.09044
88............................................................ 0.10286 0.10220
89............................................................ 0.11596 0.11526
90............................................................ 0.13036 0.12962
91............................................................ 0.14540 0.14463
92............................................................ 0.16090 0.16012
93............................................................ 0.17679 0.17601
94............................................................ 0.19284 0.19206
95............................................................ 0.20898 0.20822
96............................................................ 0.22620 0.22545
97............................................................ 0.24386 0.24311
98............................................................ 0.26196 0.26123
99............................................................ 0.28059 0.27986
100........................................................... 0.29960 0.29887
101........................................................... 0.31891 0.31817
102........................................................... 0.33825 0.33748
103........................................................... 0.35757 0.35673
104........................................................... 0.37670 0.37583
105........................................................... 0.39521 0.39436
106........................................................... 0.41327 0.41245
107........................................................... 0.43080 0.42999
108........................................................... 0.44743 0.44667
109........................................................... 0.46339 0.46271
110........................................................... 0.47628 0.47568
111........................................................... 0.48468 0.48417
112........................................................... 0.49268 0.49226
113........................................................... 0.49666 0.49634
114........................................................... 0.49795 0.49773
115........................................................... 0.49928 0.49915
116........................................................... 0.49960 0.49953
117........................................................... 0.49978 0.49973
118........................................................... 0.49995 0.49993
119........................................................... 0.50000 0.50000
120........................................................... 1.00000 1.00000
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[[Page 104043]]
0
3. Amend Sec. 4044.58 by revising table 1 to Sec. 4044.58 to read as
follows:
Sec. 4044.58 Tables used to determine expected retirement age.
* * * * *
Table 1 to Sec. 4044.58--Table I-25--Selection of Retirement Rate Category
[For valuation dates in 2025 \1\]
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Participant's retirement rate category is--
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Low \2\ if Medium \3\ if monthly benefit at URA High \4\ if
If participant reaches URA in year-- monthly benefit is-- monthly benefit
at URA is less -------------------------------------- at URA is greater
than-- From-- To-- than--
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2026................................ 825 825 3,486 3,486
2027................................ 844 844 3,566 3,566
2028................................ 864 864 3,648 3,648
2029................................ 884 884 3,732 3,732
2030................................ 904 904 3,818 3,818
2031................................ 925 925 3,906 3,906
2032................................ 946 946 3,996 3,996
2033................................ 968 968 4,088 4,088
2034................................ 990 990 4,182 4,182
2035 or later....................... 1,013 1,013 4,278 4,278
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\1\ Applicable tables for valuation dates before 2025 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. 2024-29105 Filed 12-19-24; 8:45 am]
BILLING CODE 7709-02-P
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