[Federal Register Volume 88, Number 228 (Wednesday, November 29, 2023)]
[Rules and Regulations]
[Pages 83352-83353]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-26238]


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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 the 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 2024. This table is needed 
to compute the value of early retirement benefits and, thus, the total 
value of benefits under a plan.

DATES: This rule is effective January 1, 2024.

FOR FURTHER INFORMATION CONTACT: Hilary Duke ([email protected]), 
Assistant General Counsel for Regulatory Affairs, Office of the General 
Counsel, Pension Benefit Guaranty Corporation, 445 12th Street SW, 
Washington, DC 20024-2101, 202-229-3839. If you are deaf or hard of 
hearing, or have a speech disability, please dial 7-1-1 to access 
telecommunications relay services.

SUPPLEMENTARY INFORMATION: The 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

[[Page 83353]]

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'' (URA) (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 the 
unreduced retirement age. The table applies only to plans with 
valuation dates in the current year and is updated annually by PBGC to 
reflect changes in the cost of living.
    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-23 with table I-
24 to provide an updated correlation, appropriate for calendar year 
2024, between the amount of a participant's benefit and the probability 
that the participant will elect early retirement. Table I-24 will be 
used to value benefits in plans with valuation dates during calendar 
year 2024.
    PBGC has determined that notice of, and public comment on, this 
rule are impracticable, unnecessary, and contrary to the public 
interest. PBGC's update of appendix D for calendar year 2024 is 
routine. If a plan has a valuation date in 2024, the plan administrator 
needs the updated table being promulgated in this rule to value 
benefits. Accordingly, PBGC finds that the public interest is best 
served by issuing this table expeditiously, without an opportunity for 
notice and comment, and that good cause exists for making the table set 
forth in this amendment effective less than 30 days after publication 
to allow the use of the proper table to estimate the value of plan 
benefits for plans with valuation dates in early 2024.
    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

    Employee benefit plans, Pension insurance.

    In consideration of the foregoing, 29 CFR part 4044 is amended as 
follows:

PART 4044--ALLOCATION OF ASSETS IN SINGLE-EMPLOYER PLANS

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-23 and adding 
in its place table I-24 to read as follows:

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

                                Table I-24--Selection of Retirement Rate Category
                                        [For valuation dates in 2024 \1\]
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                                             Participant's retirement rate category is--
                                        ---------------------------------------------------- High \4\ if monthly
                                                              Medium \3\ if monthly benefit   benefit at URA is
  If participant reaches URA in year--   Low \2\ if monthly            at URA is--              greater than--
                                          benefit at URA is --------------------------------
                                             less than--         From--           To--
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2025...................................                 802             802           3,388                3,388
2026...................................                 821             821           3,466                3,466
2027...................................                 839             839           3,546                3,546
2028...................................                 859             859           3,627                3,627
2029...................................                 879             879           3,711                3,711
2030...................................                 899             899           3,796                3,796
2031...................................                 919             919           3,883                3,883
2032...................................                 941             941           3,973                3,973
2033...................................                 962             962           4,064                4,064
2034 or later..........................                 984             984           4,157                4,157
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\1\ Applicable tables for valuation dates before 2024 are available on PBGC's website (www.pbgc.gov).
\2\ Table II-A.
\3\ Table II-B.
\4\ Table II-C.

* * * * *

    Issued in Washington, DC.
Hilary Duke,
Assistant General Counsel for Regulatory Affairs, Pension Benefit 
Guaranty Corporation.
[FR Doc. 2023-26238 Filed 11-28-23; 8:45 am]
BILLING CODE 7709-02-P