[Federal Register Volume 68, Number 230 (Monday, December 1, 2003)]
[Rules and Regulations]
[Pages 67032-67033]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-29642]


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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.

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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 2004. This rule also amends 
the PBGC's regulation on Disclosure to Participants by adding 
information on 2004 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 2004.

EFFECTIVE DATE: January 1, 2004.

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, $65,100 is the 
contribution and benefit base that is to be used to calculate the PBGC 
maximum guaranteeable benefit for 2004. Accordingly, the formula under 
section 4022(b)(3)(B) of ERISA and 29 CFR 4022.22(b) is: $750 
multiplied by $65,100/$13,200. Thus, the maximum monthly benefit 
guaranteeable by the PBGC in 2004 is $3,698.86 per month in

[[Page 67033]]

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 2004. (If a benefit is payable in a different 
form or begins at a different age, the maximum guaranteeable amount is 
the actuarial equivalent of $3,698.86 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 2004 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 2004 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.

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
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                                                   The maximum guaranteed benefit for an individual starting to receive benefits at the age listed below
                                                                              is the amount (monthly or annual) listed below:
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            If a plan terminates in--                      Age 65                    Age 62                    Age 60                    Age 55
                                                 -------------------------------------------------------------------------------------------------------
                                                    Monthly       Annual      Monthly       Annual      Monthly       Annual      Monthly       Annual
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                                                                      * * * * * * *
2004............................................    $3,698.86   $44,386.32    $2,922.10   $35,065.20    $2,404.26   $28,851.12    $1,664.49   $19,973.88
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* * * * *

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
                                                           guaranteeable
                           Year                               monthly
                                                              benefit
------------------------------------------------------------------------
                                * * * * *
2004.....................................................      3,698.86
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    Issued in Washington, DC, this 21st day of November, 2003.
Joseph H. Grant,
Deputy Executive Director and Chief Operating Officer, Pension Benefit 
Guaranty Corporation.
[FR Doc. 03-29642 Filed 11-28-03; 8:45 am]
BILLING CODE 7708-01-P