[Federal Register: December 1, 2009 (Volume 74, Number 229)]

[Rules and Regulations]               

[Page 62697-62699]

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

[DOCID:fr01de09-7]                         



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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 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 2010. This table is needed 

in order to compute the value of early retirement benefits and, thus, 

the total value of benefits under a plan.



DATES: Effective Date: January 1, 2010.



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-



[[Page 62698]]



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: 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 

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-09 with Table I-

10 in order to provide an updated correlation, appropriate for calendar 

year 2010, between the amount of a participant's benefit and the 

probability that the participant will elect early retirement. Table I-

10 will be used to value benefits in plans with valuation dates during 

calendar year 2010.

    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 2010, 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 2010.

    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:



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-09 and adding 

in its place Table I-10 to read as follows:



Appendix D to Part 4044--Tables Used To Determine Expected Retirement 

Age



                                TABLE I-10--Selection of Retirement Rate Category

              [For Plans with valuation dates after December 31, 2009, and before January 1, 2011]

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                                                            Participant's retirement rate category is--

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

                                                      Low \1\ if       Medium \2\ if monthly      High \3\ if

      If participant reaches URA in year--         monthly benefit      benefit at URA is--     monthly benefit

                                                    at URA is less  -------------------------- at URA is greater

                                                        than--          From--        To--           than--

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2011............................................                562          562        2,376              2,376

2012............................................                573          573        2,419              2,419

2013............................................                583          583        2,465              2,465

2014............................................                595          595        2,514              2,514

2015............................................                608          608        2,567              2,567

2016............................................                620          620        2,621              2,621

2017............................................                633          633        2,676              2,676

2018............................................                647          647        2,732              2,732

2019............................................                660          660        2,790              2,790

2020 or later...................................                674          674        2,848              2,848

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\1\ Table II-A.

\2\ Table II-B.

\3\ Table II-C.





[[Page 62699]]



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    Issued in Washington, DC, this 13th day of November, 2009.

Vincent K. Snowbarger,

Acting Director, Pension Benefit Guaranty Corporation.

[FR Doc. E9-28636 Filed 11-30-09; 8:45 am]



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