[Federal Register: November 30, 2007 (Volume 72, Number 230)]
[Rules and Regulations]
[Page 67645-67646]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr30no07-7]
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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
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 that applies to any plan being terminated
either in a distress termination or involuntarily by the PBGC with a
valuation date falling in 2008, and is used to determine expected
retirement ages for plan participants. This table is needed in order to
compute the value of early retirement benefits and, thus, the total
value of benefits under the plan.
DATES: Effective Date: January 1, 2008.
FOR FURTHER INFORMATION CONTACT: Catherine B. Klion, Manager,
Regulatory and Policy Division, Legislative and Regulatory Department,
Pension Benefit Guaranty Corporation, 1200 K Street, NW., Washington,
DC 20005, 202-326-4024. (TTY/TDD users may call the Federal relay
service toll-free at 1-800-877-8339 and ask to be connected to 202-326-
4024.)
SUPPLEMENTARY INFORMATION: The 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 of the Employee Retirement Income
Security Act of 1974. Under ERISA section 4041(c), guaranteed benefits
and benefit liabilities under a plan that is undergoing a distress
termination must be valued in accordance with part 4044, subpart B. In
addition, when the 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
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'' (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 unreduced
retirement age. The table applies only to plans with valuation dates in
the current year and is updated annually by the PBGC to reflect changes
in the cost of living, etc.
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-07 with Table I-
08 in order to provide an updated correlation, appropriate for calendar
year 2008, between the amount of a participant's benefit and the
probability that the participant will elect early retirement. Table I-
08 will be used to value benefits in plans with valuation dates during
calendar year 2008.
The PBGC has determined that notice of and public comment on this
rule are impracticable and contrary to the public interest. Plan
administrators need to be able to estimate accurately the value of plan
benefits as early as possible before initiating the termination
process. For that purpose, if a plan has a valuation date in 2008, the
plan administrator needs the updated table being promulgated in this
rule. Accordingly, the public interest is best served by issuing this
table expeditiously, without an opportunity for notice and comment, to
allow as much time as possible to estimate the value of plan benefits
with the proper table for plans with valuation dates in early 2008.
The 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
Pension insurance, Pensions.
0
In consideration of the foregoing, 29 CFR part 4044 is amended as
follows:
PART 4044--[AMENDED]
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-07 and
[[Page 67646]]
adding in its place Table I-08 to read as follows:
Appendix D to Part 4044--Tables Used to Determine Expected Retirement
Age
TABLE I-08.--Selection of Retirement Rate Category
[(For Plans with valuation dates after December 31, 2007, and before January 1, 2009)]
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Participant's Retirement Rate Category is--
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Low \1\ if Medium \2\ if monthly benefit High \3\ if
Participant reaches URA in year-- monthly at URA is monthly
benefit at -------------------------------- benefit at
URA is less URA is greater
than-- From To than--
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2009............................................ 536 536 2,264 2,264
2010............................................ 549 549 2,320 2,320
2011............................................ 563 563 2,376 2,376
2012............................................ 576 576 2,430 2,430
2013............................................ 589 589 2,486 2,486
2014............................................ 602 602 2,544 2,544
2015............................................ 616 616 2,602 2,602
2016............................................ 630 630 2,662 2,662
2017............................................ 645 645 2,723 2,723
2018 or later................................... 660 660 2,786 2,786
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\1\ Table II-A.
\2\ Table II-B.
\3\ Table II-C.
* * * * *
Issued in Washington, DC, this 27th day of November, 2007.
Vincent K. Snowbarger,
Deputy Director, Pension Benefit Guaranty Corporation.
[FR Doc. E7-23270 Filed 11-29-07; 8:45 am]
BILLING CODE 7709-01-P