[Federal Register: December 1, 2004 (Volume 69, Number 230)]

[Rules and Regulations]               

[Page 69820-69821]

From the Federal Register Online via GPO Access [wais.access.gpo.gov]

[DOCID:fr01de04-7]                         



=======================================================================

-----------------------------------------------------------------------



PENSION BENEFIT GUARANTY CORPORATION



29 CFR Parts 4011 and 4022



 

Disclosure to Participants; Benefits Payable in Terminated 

Single-Employer Plans



AGENCY: Pension Benefit Guaranty Corporation.



ACTION: Final rule.



-----------------------------------------------------------------------



SUMMARY: This rule amends Appendix D to the Pension Benefit Guaranty 

Corporation's regulation on Benefits Payable in Terminated Single-

Employer Plans by adding the maximum guaranteeable pension benefit that 

may be paid by the PBGC with respect to a plan participant in a single-

employer pension plan that terminates in 2005. This rule also amends 

the PBGC's regulation on Disclosure to Participants by adding 

information on 2005 maximum guaranteed benefit amounts to Appendix B. 

The amendment is necessary because the maximum guarantee amount changes 

each year, based on changes in the contribution and benefit base under 

section 230 of the Social Security Act. The effect of the amendment is 

to advise plan participants and beneficiaries of the increased maximum 

guarantee amount for 2005.



EFFECTIVE DATE: January 1, 2005.



FOR FURTHER INFORMATION CONTACT: Harold J. Ashner, Assistant General 

Counsel, Office of the General Counsel, Pension Benefit Guaranty 

Corporation, 1200 K Street, NW., Washington, DC 20005-4026; 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: Section 4022(b) of the Employee Retirement 

Income Security Act of 1974 provides for certain limitations on 

benefits guaranteed by the PBGC in terminating single-employer pension 

plans covered under title IV of ERISA. One of the limitations, set 

forth in section 4022(b)(3)(B), is a dollar ceiling on the amount of 

the monthly benefit that may be paid to a plan participant (in the form 

of a life annuity beginning at age 65) by the PBGC. The ceiling is 

equal to ``$750 multiplied by a fraction, the numerator of which is the 

contribution and benefit base (determined under section 230 of the 

Social Security Act) in effect at the time the plan terminates and the 

denominator of which is such contribution and benefit base in effect in 

calendar year 1974 [$13,200].'' This formula is also set forth in Sec.  

4022.22(b) of the PBGC's regulation on Benefits Payable in Terminated 

Single-Employer Plans (29 CFR part 4022). Appendix D to part 4022 

lists, for each year beginning with 1974, the maximum guaranteeable 

benefit payable by the PBGC to participants in single-employer plans 

that have terminated in that year.

    Section 230(d) of the Social Security Act (42 U.S.C. 430(d)) 

provides special rules for determining the contribution and benefit 

base for purposes of ERISA section 4022(b)(3)(B). Each year the Social 

Security Administration determines, and notifies the PBGC of, the 

contribution and benefit base to be used by the PBGC under these 

provisions, and the PBGC publishes an amendment to Appendix D to Part 

4022 to add the guarantee limit for the coming year.

    The PBGC has been notified by the Social Security Administration 

that, under section 230 of the Social Security Act, $66,900 is the 

contribution and benefit base that is to be used to calculate the PBGC 

maximum guaranteeable benefit for 2005. Accordingly, the formula under 

section 4022(b)(3)(B) of ERISA and 29 CFR Sec.  4022.22(b) is: $750 

multiplied by $66,900/$13,200. Thus, the maximum monthly benefit 

guaranteeable by the PBGC in 2005 is $3,801.14 per month in the form of 

a life annuity beginning at age 65. This amendment updates Appendix D 

to Part 4022 to add this maximum guaranteeable amount for plans that 

terminate in 2005. (If a benefit is payable in a different form or 

begins at a different age, the maximum guaranteeable amount is the 

actuarial equivalent of $3,801.14 per month.)

    Section 4011 of ERISA requires plan administrators of certain 

underfunded plans to provide notice to plan participants and 

beneficiaries of the plan's funding status and the limits of the PBGC's 

guarantee. The PBGC's regulation on Disclosure to Participants (29 CFR 

Part 4011) implements the statutory notice requirement. This rule 

amends Appendix B to the regulation on Disclosure to Participants by 

adding information on 2005 maximum guaranteed benefit amounts. Plan 

administrators may, subject to the requirements of that regulation, 

include this information in participant notices.

    General notice of proposed rulemaking is unnecessary. The maximum 

guaranteeable benefit is determined according to the formula in section 

4022(b)(3)(B) of ERISA, and these amendments make no change in its 

method of calculation but simply list 2005 maximum guaranteeable 

benefit amounts for the information of the public.

    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



29 CFR Part 4011



    Employee benefit plans, Pension insurance, Reporting and 

recordkeeping requirements.



[[Page 69821]]



29 CFR Part 4022



    Pension insurance, Pensions, Reporting and recordkeeping 

requirements.







0

In consideration of the foregoing, 29 CFR parts 4011 and 4022 are 

amended as follows:



PART 4011--DISCLOSURE TO PARTICIPANTS



0

1. The authority citation for part 4011 continues to read as follows:



    Authority: 29 U.S.C. 1302(b)(3), 1311.





0

2. Appendix B to part 4011 is amended by adding a new entry in 

numerical order to the table to read as follows.



                                              Appendix B to Part 4011--Table of Maximum Guaranteed Benefits

--------------------------------------------------------------------------------------------------------------------------------------------------------

                                           The maximum guaranteed benefit for an individual starting to receive benefits at the age listed below is the

                                                                            amount  (monthly or annual)  listed below:

                                         ---------------------------------------------------------------------------------------------------------------

       If a plan  terminates in--                   Age 65                      Age 62                      Age 60                      Age 55

                                         ---------------------------------------------------------------------------------------------------------------

                                             Monthly       Annual        Monthly       Annual        Monthly       Annual        Monthly       Annual

--------------------------------------------------------------------------------------------------------------------------------------------------------



                                                                      * * * * * * *

2005....................................     $3,801.14    $45,613.68     $3,002.90    $36,034.80     $2,470.74    $29,648.88     $1,710.51    $20,526.12

--------------------------------------------------------------------------------------------------------------------------------------------------------



* * * * *



PART 4022--BENEFITS PAYABLE IN TERMINATED SINGLE-EMPLOYER PLANS



0

3. The authority citation for Part 4022 continues to read as follows:



    Authority: 29 U.S.C. 1302, 1322, 1322b, 1341(c)(3)(D), and 1344.





0

4. Appendix D to part 4022 is amended by adding a new entry to the 

table to read as follows. The introductory text is reproduced for the 

convenience of the reader and remains unchanged.



Appendix D to Part 4022--Maximum Guaranteeable Monthly Benefit



    The following table lists by year the maximum guaranteeable 

monthly benefit payable in the form of a life annuity commencing at 

age 65 as described by Sec.  4022.22(b) to a participant in a plan 

that terminated in that year:



------------------------------------------------------------------------

                                                             Maximum

                          Year                            guaranteeable

                                                         monthly benefit

------------------------------------------------------------------------



                                * * * * *

2005...................................................        $3,801.14

------------------------------------------------------------------------





    Issued in Washington, DC, this 23rd day of November, 2004.

Joseph H. Grant,

Deputy Executive Director and Chief Operating Officer, Pension Benefit 

Guaranty Corporation.

[FR Doc. 04-26428 Filed 11-30-04; 8:45 am]



BILLING CODE 7708-01-P