[Federal Register: December 1, 2009 (Volume 74, Number 229)]
[Rules and Regulations]
[Page 62697]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr01de09-6]
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PENSION BENEFIT GUARANTY CORPORATION
29 CFR Part 4022
Benefits Payable in Terminated Single-Employer Plans; Limitations
on Guaranteed Benefits; Maximum Guaranteeable Benefit
AGENCY: Pension Benefit Guaranty Corporation.
ACTION: Final rule.
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SUMMARY: This rule removes Appendix D from Pension Benefit Guaranty
Corporation's regulation on Benefits Payable in Terminated Single-
Employer Plans. Appendix D is a historical list of the maximum
guaranteeable monthly benefit for each year as determined in accordance
with section 4022(b)(3)(B) of the Employee Retirement Income Security
Act of 1974. This information is available on PBGC's Web site (http://
www.pbgc.gov).
DATES: Effective December 31, 2009.
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 (ERISA) provides for certain limitations on
benefits guaranteed by Pension Benefit Guaranty Corporation (PBGC) in
terminating single-employer pension plans covered under Title IV of
ERISA. One of the limitations, set forth in ERISA 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 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
PBGC's regulation on Benefits Payable in Terminated Single-Employer
Plans (29 CFR Part 4022). 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).\1\
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\1\ For example, under section 230 of the Social Security Act,
$79,200 is the contribution and benefit base that is to be used to
calculate the PBGC maximum guaranteeable benefit for 2010.
Accordingly, the formula under section 4022(b)(3)(B) of ERISA and 29
CFR Sec. 4022.22(b) is: $750 multiplied by $79,200/$13,200. Thus,
the maximum monthly benefit guaranteeable by the PBGC for plans that
terminate in 2010 is $4,500.00 per month in the form of a life
annuity beginning at age 65. (If a benefit is payable in a different
form or begins at a different age, the maximum guaranteeable amount
is the actuarial equivalent of $4,500.00 per month.)
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PBGC has no discretion in the determination of the maximum
guaranteeable benefit. The maximum guaranteeable benefit is determined
by applying the formula in ERISA section 4022(b)(3)(B) to the
contribution and benefit base. Each year Social Security Administration
determines, and notifies PBGC of, the contribution and benefit base to
be used under ERISA section 4022(b)(3)(B), and PBGC applies the
statutory formula to arrive at the maximum guaranteeable benefit. PBGC
has historically published a table showing the maximum guaranteeable
benefit for each year in appendix D to the benefit payment regulation
and updated the list each year by amending the table in the appendix.
In recent years, PBGC has also published this information on its Web
site (http://www.pbgc.gov; click on ``Workers & Retirees,'' then on
``Maximum monthly guarantee tables'' under the heading ``Benefits
Information'' in the center column).
PBGC has concluded that since the maximum guaranteeeable benefits
are easily accessible to the public on its Web site, it is no longer
necessary to publish the information in the Federal Register (where
annual updates to appendix D to the benefit payment regulation are
published) or the Code of Federal Regulations (where the appendix
itself is published). Accordingly, PBGC is removing appendix D from the
benefit payment regulation. This action has no substantive legal
effect.
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 this amendment makes no change in its
method of calculation but simply eliminates one of the methods PBGC
currently uses to inform the public of the maximum guaranteeable
benefit.
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 does not apply (5
U.S.C. 601(2)).
List of Subjects in 29 CFR Part 4022
Pension insurance, Pensions, Reporting and recordkeeping
requirements.
0
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 removed.
Issued in Washington, DC, this 15th day of November, 2009.
Vincent K. Snowbarger,
Acting Director, Pension Benefit Guaranty Corporation.
[FR Doc. E9-28638 Filed 11-30-09; 8:45 am]
BILLING CODE 7709-01-P