[Federal Register: December 1, 2006 (Volume 71, Number 231)]
[Rules and Regulations]
[Page 69480-69481]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr01de06-9]
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PENSION BENEFIT GUARANTY CORPORATION
29 CFR Part 4022
Benefits Payable in Terminated Single-Employer Plans
AGENCY: Pension Benefit Guaranty Corporation.
ACTION: Final rule.
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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 2007. 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
administrators, participants and beneficiaries of the increased maximum
guarantee amount for 2007.
DATES: Effective Date: January 1, 2007.
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: 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
[[Page 69481]]
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, $72,600 is the
contribution and benefit base that is to be used to calculate the PBGC
maximum guaranteeable benefit for 2007. Accordingly, the formula under
section 4022(b)(3)(B) of ERISA and 29 CFR 4022.22(b) is: $750
multiplied by $72,600/$13,200. Thus, the maximum monthly benefit
guaranteeable by the PBGC in 2007 is $4,125.00 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 2007. (If a benefit is payable in a different form or
begins at a different age, the maximum guaranteeable amount is the
actuarial equivalent of $4,125.00 per month.)
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 2007 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 in 29 CFR Part 4022
Pension insurance, Pensions, Reporting and recordkeeping
requirements.
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In consideration of the foregoing, 29 CFR part 4022 is amended as
follows:
PART 4022--BENEFITS PAYABLE IN TERMINATED SINGLE-EMPLOYER PLANS
0
1. 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.
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2. Appendix D to part 4022 is amended by adding a new entry to the end
of 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:
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Maximum
guaranteeable
Year monthly
benefit
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* * * * *
2007.................................................... $4,125.00
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Issued in Washington, DC, this 17th day of November, 2006.
Vincent K. Snowbarger,
Interim Director, Pension Benefit Guaranty Corporation.
[FR Doc. E6-20389 Filed 11-30-06; 8:45 am]
BILLING CODE 7709-01-P