[Federal Register Volume 89, Number 110 (Thursday, June 6, 2024)]
[Rules and Regulations]
[Pages 48291-48309]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-11819]


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PENSION BENEFIT GUARANTY CORPORATION

29 CFR Parts 4001, 4010, 4022, 4041, 4041A, 4043, 4044, 4050, 4262, 
and 4281

RIN 1212-AA55


Valuation Assumptions and Methods

AGENCY: Pension Benefit Guaranty Corporation.

ACTION: Final rule.

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SUMMARY: This final rule updates the interest, mortality, and expense 
assumptions used to determine the present value of benefits for a 
single-employer pension plan under subpart B of the Pension Benefit 
Guaranty Corporation's regulation on Allocation of Assets in Single-
Employer Plans, to determine components of mass withdrawal liability 
for a multiemployer pension plan, and for other purposes.

DATES: 
    Effective date: This rule is effective July 8, 2024.
    Applicability date: These amendments apply to calculations where 
the valuation date is on or after July 31, 2024.
    Incorporation by reference: The incorporation by reference of 
certain material listed in this rule is approved by the Director of the 
Federal Register as of July 8, 2024.

FOR FURTHER INFORMATION CONTACT: Gregory M. Katz 
([email protected]), Deputy Assistant General Counsel for 
Regulatory Affairs, Office of the General Counsel, Pension Benefit 
Guaranty Corporation, 445 12th Street SW, Washington, DC 20024-2101; 
202-229-3829. 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:

Executive Summary

Purpose and Authority

    This final rule updates the actuarial assumptions used to determine 
the present value of a single-employer plan's benefits when it 
terminates in a distress or involuntary termination, to determine the 
present value of multiemployer plan benefits in certain withdrawal 
liability calculations, and for other purposes. Except for conforming 
changes and some technical and editorial changes, the final rule is 
substantially the same as the proposed rule.
    Legal authority for this action comes from section 4002(b)(3) of 
the Employee Retirement Income Security Act of 1974 (ERISA), which 
authorizes the Pension Benefit Guaranty Corporation (PBGC) to issue 
regulations to carry out the purposes of title IV of ERISA, and section 
4044 of ERISA (Allocation of Assets). It also comes from section 4001 
of ERISA (Definitions); section 4010 of ERISA (Authority to Require 
Certain Information); section 4022 of ERISA (Single-Employer Plan 
Benefits Guaranteed); section 4041 of ERISA (Termination of Single-
Employer Plans); section 4041A of ERISA (Termination of Multiemployer 
Plans); section 4043 of ERISA (Reportable Events); section 4050 of 
ERISA (Missing Participants); section 4062 of ERISA (Liability for 
Termination of Single-Employer Plans Under a Distress Termination or a 
Termination by Corporation); section 4219 of ERISA (Notice, Collection, 
Etc., of Withdrawal Liability); section 4262 of ERISA (Special 
Financial Assistance by the Corporation); and section 4281 of ERISA 
(Benefits Under Certain Terminated Plans).

Major Provisions

    This final rule modifies the interest, mortality, and expense 
assumptions for valuing benefits under subpart B to PBGC's regulation 
on Allocation of Assets in Single-Employer Plans (``benefits valuation 
regulation'') (29 CFR part 4044) to:
     Modernize the interest assumption structure by adopting a 
yield curve approach;
     Enable the use of market interest rates as of the date of 
liability measurement (i.e., the valuation date) as the basis for the 
interest assumption;
     Increase transparency by using a procedure based on 
publicly available yield curves as of the valuation date;
     Adopt a more recent mortality table along with a 
generational mortality improvement projection; and
     Simplify the expense assumption.
    Because the assumptions for valuing benefits are incorporated by 
reference in other regulations, the changes to these assumptions affect 
PBGC's regulations on Annual Financial and Actuarial Information 
Reporting (29 CFR part 4010); Missing Participants (29 CFR part 4050); 
Notice, Collection, and Redetermination of Withdrawal Liability (29 CFR 
part 4219); Special Financial Assistance by PBGC (29 CFR part 4262); 
Duties of Plan Sponsor Following Mass Withdrawal (29 CFR part 4281); 
and other regulations.

Background

    The Pension Benefit Guaranty Corporation (PBGC) administers two 
insurance programs for private-sector defined benefit pension plans 
under title IV of the Employee Retirement Income Security Act of 1974 
(ERISA): a single-employer plan termination insurance program and a 
multiemployer plan insolvency insurance program. In addition, PBGC 
administers a special financial assistance program for eligible 
financially distressed multiemployer plans.
    Under the single-employer plan termination insurance program, 
covered plans that are underfunded may terminate either in a distress 
termination under section 4041(c) of ERISA or in an involuntary 
termination (one initiated by PBGC) under section 4042 of ERISA. When 
such a plan terminates, PBGC typically is appointed statutory trustee 
of the plan and becomes responsible for paying benefits in accordance 
with the provisions of title IV of ERISA.
    Under the multiemployer insurance program, PBGC provides financial

[[Page 48292]]

assistance under section 4261 of ERISA to plans that are insolvent and 
unable to pay benefits at the guaranteed level. This financial 
assistance is primarily in the form of financial assistance loans, paid 
to the plans periodically so that they can pay basic benefits when due. 
Additionally, under the special financial assistance program under 
section 4262 of ERISA, PBGC provides funding to eligible financially 
troubled multiemployer plans upon approval of an application. This 
final rule applies to the single-employer program, the multiemployer 
program, and the special financial assistance program.
    PBGC has identified these amendments as part of its ongoing review 
of its regulations to ensure that PBGC provides clear and helpful 
guidance and modernizes outdated methodologies.

Purpose of the Assumptions Described in the Benefits Valuation 
Regulation

    Under the single-employer insurance program, if a pension plan 
terminates without enough assets to provide for all benefits either in 
a distress termination under section 4041(c) of ERISA or in a plan 
termination initiated by PBGC under section 4042 of ERISA, PBGC 
typically is appointed statutory trustee of the plan and becomes 
responsible for paying benefits in accordance with the provisions of 
title IV of ERISA. When this happens, PBGC must determine (1) the 
extent to which participants' benefits are funded under the benefits 
valuation rules, (2) whether a terminated plan has sufficient assets to 
pay guaranteed benefits, and (3) how much a plan sponsor and its 
controlled group owe PBGC because of the termination under section 4062 
of ERISA. The assumptions described in the benefits valuation 
regulation are used to value a plan's benefit liabilities for these 
purposes.
    In setting the assumptions under the benefits valuation regulation, 
PBGC's long-standing policy is to set assumptions that produce 
valuations similar to the premium that a private-sector insurance 
company would charge for a group annuity contract covering the same 
plan benefits.\1\ This policy ensures that for a plan entering PBGC 
trusteeship, the plan's benefit liabilities are measured consistently 
with annuity market pricing.
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    \1\ Because plan terms, plan demographics, and annuity 
providers' methods vary, no single set of assumptions could exactly 
match the value private-sector annuity providers would assign to 
benefits for all terminating plans. Instead, the assumptions are 
intended to produce reasonable valuation results on average for the 
range of plans terminating in distress or involuntary terminations, 
rather than for any particular plan or plan type. See 70 FR 72205, 
72205 (Dec. 2, 2005).
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    These assumptions are also used in other situations where it is 
appropriate for liabilities to be in line with private-sector group 
annuity prices. For example, PBGC's regulations on Notice, Collection, 
and Redetermination of Withdrawal Liability (29 CFR part 4219) and 
Duties of Plan Sponsor Following Mass Withdrawal (29 CFR part 4281) 
provide that these assumptions are used to value liabilities for 
purposes of determining withdrawn employers' reallocation liability \2\ 
in the event of a mass withdrawal from a multiemployer plan. 
Multiemployer plans that receive special financial assistance under the 
regulation on Special Financial Assistance by PBGC (29 CFR part 4262) 
must, as a condition of receiving special financial assistance, use the 
interest assumption to determine withdrawal liability for a prescribed 
period. Additionally, plan sponsors are required to use these 
assumptions for certain purposes (e.g., reporting benefit liabilities 
in filings required under PBGC's regulation on Annual Financial and 
Actuarial Information Reporting (29 CFR part 4010) or determining 
certain amounts to transfer to PBGC's Missing Participants Program on 
behalf of a missing participant of a terminating defined benefit plan 
under PBGC's regulation on Missing Participants (29 CFR part 4050)) and 
may use them for other purposes (e.g., to ensure that plan spinoffs 
comply with section 414 (l) of the Internal Revenue Code (the 
Code)).\3\
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    \2\ When a multiemployer plan terminates in a mass withdrawal, 
section 4219 of ERISA requires that unfunded vested benefits be 
fully allocated among withdrawing employers. The liability assessed 
in this process is called reallocation liability.
    \3\ The assumptions are deemed reasonable for use in determining 
the value of ``benefits on a termination basis'' after a merger or 
spinoff under Internal Revenue Service regulations at 26 CFR 
1.414(l)-1.
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Proposed Rule

    On August 18, 2023, PBGC published a proposed rule \4\ to update 
the benefit valuation regulation's interest, mortality, and expense 
assumptions. PBGC provided a 60-day comment period and received five 
comment letters. Commenters were generally supportive of PBGC's efforts 
to make its assumptions more modern and transparent, and made specific 
suggestions. A discussion of the provisions of the final rule, the 
comment letters, and PBGC's responses follows. Except for conforming 
changes and some technical and editorial changes, the final rule is 
substantially the same as the proposed rule.
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    \4\ 88 FR 56563 (Aug. 18, 2023).
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Interest Assumption

Current Assumption

    The benefits valuation regulation contains an interest assumption 
for determining the present value of future payments (4044 interest 
assumption). Since November 1993, the 4044 interest assumption has been 
expressed in a two-component structure known as ``select and ultimate'' 
in which one interest factor is assumed to be in effect for the first 
20 or 25 years from the valuation date, and the other interest factor 
is assumed to be in effect thereafter.
    To align valuations with the group annuity market, the American 
Council of Life Insurers conducts periodic surveys \5\ of private-
sector single-premium nonparticipating group annuity prices for PBGC. 
These surveys ask insurers for sample market pricing information 
(exclusive of loads for administrative expenses). The select and 
ultimate rates are determined such that in combination with the 
mortality assumption provided under the benefits valuation regulation, 
the resulting liabilities are in line with group annuity prices from 
the survey.\6\
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    \5\Survey approved under OMB Control Number 1212-0030 (expires 
July 31, 2024).
    \6\ See 41 FR 48484, 48485 (Nov. 3, 1976). ``PBGC's interest 
assumptions have been designed so that, when coupled with the 
mortality assumptions found in the regulation, the benefit values 
obtained . . . are in line with the industry annuity prices.''
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    PBGC publishes the interest assumption in appendix B to part 4044 
each quarter, for use in the subsequent quarter. Therefore, the 
interest rates used have not been rates observed on the valuation date.

Reasons for Change

    This final rule improves upon current methodology in several ways. 
Actuarial practice, with the help of technology, has moved toward a 
bond yield curve approach where future benefits are discounted to the 
valuation date using yields for which the time to maturity equates to 
the length of the discounting period. By associating an interest rate 
with each specific benefit payment time horizon, using a yield curve 
for discounting better represents the present value of future benefits. 
As a result, the select and ultimate structure of PBGC's interest 
assumption under the benefits valuation regulation has become 
increasingly obsolete. A yield curve approach also better reflects the 
term structure of the fixed income investments that underlie the price 
of group annuities.

[[Page 48293]]

    In addition, the rule improves the methodology by eliminating the 
lag between when data used to set PBGC's interest assumption are 
observed and the interest rate environment on the valuation date. 
Eliminating the lag is desirable because the interest rate environment 
on the valuation date also impacts the value of the assets that pension 
funds invest in, including fixed income investments, equity, and real 
estate.
    Lastly, the final rule increases transparency with respect to the 
process for setting the 4044 interest assumption. The public 
availability of month-end bond yield data now makes it possible to 
adopt a methodology that would increase transparency and, in almost all 
situations, eliminate the lag entirely.\7\
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    \7\ In the uncommon situation of a mid-month valuation date, the 
lag is reduced significantly, but not completely eliminated.
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    For these reasons, PBGC is structuring the 4044 interest assumption 
as a yield curve, more closely replicating the actual yields on the 
investments backing group annuities, and better reflecting today's 
actuarial practice. In addition, this final rule incorporates publicly 
available bond yield data into the methodology used to determine the 
4044 interest assumption to increase transparency and bases the 
interest assumption on bond yields as of the valuation date, or as 
close as practical for valuations that are not as of a month-end.

Updated 4044 Interest Assumption

    The 4044 interest assumption in the final rule is the same as in 
the proposed rule. Commenters generally supported the transparency of 
the proposed method for determining the interest assumption and how it 
better reduces lag from the date data is observed to the valuation 
date. Some commenters made suggestions which are discussed in this 
section. The new interest assumption is based on a blend of two 
publicly available yield curves (the ``blended market yield curve'') 
and is adjusted to the extent necessary so that the resulting 
liabilities align with group annuity prices. As with the proposed rule, 
the final rule's interest assumption consists of interest rates at 
maturity points from 0.5 to 30.0 years in half-year increments. The 
interest rate for the maturity point at year 30.0 is used to discount 
benefits expected to be paid more than 30 years after the valuation 
date. One commenter suggested that PBGC use a ``uniform'' interest rate 
rather than a yield curve. PBGC did not adopt this suggestion, because, 
as discussed in more detail earlier in the preamble, actuarial practice 
has moved toward a yield curve approach that better represents the 
present value of future benefits.
    The process used to determine the interest assumption follows. 
First, the blended market yield curve is determined in three steps:
     Step 1--Obtain rates for maturities 0.5 through 30.0 on 
Treasury securities from the Department of the Treasury (Treasury 
Department) Nominal Coupon Issues Spot Rates, End of Month yield curve 
(TNC Yield Curve).\8\
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    \8\ Available at https://home.treasury.gov/data/treasury-coupon-issues-and-corporate-bond-yield-curves/treasury-coupon-issues.
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     Step 2--Obtain rates on corporate bonds for maturities 0.5 
through 30.0 from the Treasury Department's High Quality Market 
Corporate Bond Yield Curve Spot Rates, End of Month yield curve (HQM 
Bond Yield Curve).\9\
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    \9\ Available at https://home.treasury.gov/data/treasury-coupon-issues-and-corporate-bond-yield-curve/corporate-bond-yield-curve.
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     Step 3--Combine the rates obtained in steps 1 and 2 
weighting each corporate bond rate at two-thirds and each Treasury rate 
at one-third.\10\
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    \10\ The rule primarily uses yields on investment-grade 
corporate bonds when setting its assumptions because such yields are 
the most important driver of group annuity prices. A white paper 
describing, among other things, additional details about this 
weighting is available on PBGC's website, www.pbgc.gov.
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    Rather than weighting corporate bonds at two-thirds and Treasury 
rates at one-third for all maturities, one commenter suggested using a 
``gliding'' weight that varies over different maturities. The goal 
would be to reflect the fact that insurers typically have different 
pricing assumptions for immediate and deferred annuities (because of 
the higher risk associated with deferred annuities than immediate 
annuities). PBGC did not adopt this suggestion because a gliding weight 
would introduce substantial unnecessary complexity to the calculation 
of the blended market yield curve, and the effect described by the 
commenter is accounted for in the adjustment spreads discussed later in 
this section.
    The yield curves used to develop the blended market yield curve are 
based on yields as of the end of each month. In PBGC's experience, most 
calculations that use 4044 assumptions use valuation dates as of the 
last day of a month, and for such calculations, the applicable blended 
market yield curve will be determined using the published TNC and HQM 
curves as of the valuation date. To accommodate other valuation dates, 
the final rule includes a ``lookback'' rule for valuation dates that 
are not as of the end of the month. Under the lookback rule, if the 
valuation date is not on the last day of a month, the applicable 
blended market yield curve as of the last day of the prior month will 
be used. For example, if the valuation date is February 15, 2023, the 
applicable blended market yield curve is the blended market yield curve 
as of January 31, 2023.
    PBGC considered other possible rules for determining the blended 
market yield curve for valuation dates that are not the last day of the 
month, so that its interest assumption might better reflect the bond 
market on the actual valuation date (e.g., a blend of the current and 
prior month's blended market yield curves, a requirement to use the 
blended market yield curve for the end of the month closest to the 
valuation date). However, because most plan terminations occur on the 
last day of a month, PBGC concluded that the benefits did not outweigh 
the additional complexity. PBGC requested comments on the application 
of the proposed interest assumption to valuation dates other than the 
last day of the month. One commenter responded that the proposed 
methodology is a significant improvement over current methodology.
    As noted earlier in this preamble, once the blended market yield 
curve is determined, it will be adjusted so that the resulting present 
values align with group annuity prices. The term ``4044 yield curve'' 
is used to describe the blended market yield curve after reflecting 
such adjustments. The adjustments, or ``spreads,'' will be in the 
format of a curve (i.e., a list of spreads through year 30, each of 
which applies to a specific point in the blended market yield curve). 
PBGC will determine and publish the spreads quarterly based on survey 
data on pricing of private-sector group annuities. More specifically, 
for each survey date, PBGC will first determine a yield curve that best 
fits data from those surveys, given an assumed mortality table. Next, 
PBGC will calculate the differences between this curve and the blended 
market yield curve as of the survey date. To smooth random variation 
and seasonality effects before publishing, PBGC will average those 
differences with the differences calculated from prior survey dates to 
determine the spreads that are used to adjust the applicable blended 
market yield curve. PBGC will publish the spreads (by amending its 
regulation) that are used for adjusting the blended market curve 
shortly before each quarter begins.
    PBGC received a comment suggesting that PBGC adjust its spreads to 
compensate for a recently proposed

[[Page 48294]]

change \11\ to the way the Treasury Department determines its bond 
yields to avoid a discontinuity in PBGC's rates if the Treasury 
proposal is finalized. Because the Treasury Department has since 
finalized \12\ its proposal, there will be no discontinuity in PBGC's 
rates. For that reason, there is no need to modify PBGC's methodology 
to accommodate the changes.
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    \11\ 88 FR 41047 (June 23, 2023).
    \12\ 89 FR 2127 (Jan. 12, 2024).
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    Another commenter made suggestions for increasing the transparency 
of the process for determining spreads such as adding detail to the 
white paper and PBGC's website. PBGC is pleased to provide the white 
paper along with this final regulation to substantially enhance the 
transparency of how PBGC determines the benefit valuation regulation's 
interest assumption. PBGC will continue to strive to enhance the 
transparency of this process.
    The spreads for any quarter are used to adjust the month-end 
blended market yield curves in that quarter. For example, the first 
quarter spreads are used to adjust the blended market yield curves as 
of January 31, February 28,\13\ and March 31. Because of the lookback 
rule, the first quarter spreads also apply to valuation dates occurring 
April 1 through April 29 because for such dates, the applicable blended 
market yield curve is the curve as of March 31. Similarly, the fourth 
quarter spreads are used to adjust the blended market yield curves as 
of October 31, November 30, and December 31. Because of the lookback 
rule, the fourth quarter spreads also apply to valuation dates 
occurring January 1 through January 30, which use the blended market 
yield curve rate determined as of December 31 from the prior year.
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    \13\ February 29 in a leap year.
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    The following example illustrates how the 4044 yield curve would 
have been developed for a valuation date on December 31, 2023, had the 
rule been in effect at that time and assuming the fourth quarter 
spreads for 2023 were as shown in column D below:

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                                                      (A) Dec. 31, 2023,
                                                          nominal TNC     (B) Dec. 31, 2023,  (C) Blended market  (D) Fourth quarter    (E) Applicable
                      Maturity                          Treasury yield      HQM bond yield     yield curve  (%)    2023 spreads  (%)  4044 yield curve *
                                                          curve  (%)          curve  (%)                                                      (%)
                                                                                               \1/2\ (A) + \2/3\                               (C) + (D)
                                                                                                             (B)
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0.5.................................................                5.17                5.29                5.25                0.36                5.61
1.0.................................................                4.78                5.12                5.01                0.36                5.37
1.5.................................................                4.46                4.97                4.80                0.36                5.16
2.0.................................................                4.21                4.84                4.63                0.36                4.99
28.5................................................                4.04                5.10                4.75                0.36                5.11
29.0................................................                4.04                5.10                4.75                0.36                5.11
29.5................................................                4.04                5.10                4.75                0.37                5.12
30.0................................................                4.04                5.10                4.75                0.37             ** 5.12
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* Because of the lookback rule, valuation dates from January 1, 2024, through January 30, 2024, would also use the December 31, 2023, blended market
  yield curve which means they would also use the fourth quarter spreads. Thus, the 4044 yield curve in column (E) would also be used for those
  valuation dates.
** The 5.12% rate would be used for benefits expected to be paid 30 or more years after the valuation date.

    Because the yield curves used to develop the blended market yield 
curve are not published until a week or two after the end of the month, 
in most situations (e.g., month-end valuation dates), the 4044 yield 
curve will not be available in advance of the valuation date. Given the 
typical situations where practitioners use 4044 interest assumptions 
(e.g., Annual Financial and Actuarial Information Reporting (4010 
reporting)), PBGC does not anticipate that this will create a timing 
problem, and no commenter expressed timing concerns.
    This final rule amends the benefits valuation regulation to 
prescribe the use of the 4044 yield curve and the process to determine 
it. It also amends part 4044 to replace the select and ultimate 
interest factor table with a table showing spread adjustments for 
blended market yield curves. For each quarter, the table will show 60 
spread adjustments. Because the spread adjustments for the third 
quarter of 2024 (the quarter for which this rule is first applicable) 
will not be determinable until shortly before the third quarter, those 
spreads are not provided in this final rule. PBGC will issue the third 
quarter 2024 spread adjustments when they are available.
    Given this methodology, practitioners will be able to determine the 
4044 yield curve as of the end of any month as soon as the Treasury 
Department publishes the two yield curves underlying the development of 
the blended market yield curve. (The applicable spreads will be 
specified in the regulation before the blended market yield curves are 
available.) In addition, to reduce administrative burden on 
practitioners, PBGC will post the 4044 yield curve on its website at 
www.pbgc.gov each month shortly after its underlying data become 
available. In addition to posting the 4044 yield curve, one commenter 
suggested that PBGC should post a single interest rate ``index'' to 
provide a readily comparable measure of annuity market pricing and to 
assist multiemployer plans that receive SFA in determining withdrawal 
liability payment schedules. PBGC did not adopt this suggestion because 
cash flows vary from plan to plan, and no single index rate would be 
representative of all plans. PBGC agrees with the commenter that 
actuaries for plans that receive SFA will be able to determine 
withdrawal liability payment schedules using the 4044 yield curve and 
notes that actuaries will be able to set up a spreadsheet to do the 
calculation without much difficulty. To illustrate how the calculation 
may be done, before the effective date of the final rule, PBGC will 
post an example on its website at www.pbgc.gov.

Mortality Assumption

Current Assumptions

    The mortality assumptions prescribed by the benefits valuation 
regulation relate to the probabilities that a participant (or 
beneficiary) will survive to each expected benefit payment date. The 
regulation currently prescribes six sets of mortality tables: tables 
for male and female individuals not receiving a disability benefit 
(healthy lives); tables for male and female participants who

[[Page 48295]]

are disabled under a plan provision that does not require eligibility 
for Social Security disability benefits (non-Social Security disabled); 
and tables for male and female participants who are disabled under a 
plan provision requiring eligibility for Social Security disability 
benefits (Social Security disabled).
    For healthy lives, the mortality tables are based on the GAM-94 
Basic Table with mortality improvements projected forward to the year 
of valuation plus 10 years using the mortality improvement Scale AA, a 
static mortality improvement projection. A static mortality projection 
``project[s] the [base mortality] table for a specified number of years 
and use[s] the resulting table without further projection.'' \14\ For 
Social Security disabled participants, the regulation uses the 
Mortality Tables for Disabilities Occurring in Plan Years Beginning 
After December 31, 1994, from IRS Rev. Rul. 96-7 (1996-1 C.B. 59). For 
non-Social Security disabled participants, the benefits valuation 
regulation uses the healthy lives mortality rates for an individual 3 
years older (i.e., the table is set forward by 3 years). In addition, 
to prevent the rates at older ages from exceeding the rates for Social 
Security disabled participants, the mortality rates for non-Social 
Security disabled participants are capped at the corresponding rates 
for Social Security disabled participants. These assumptions are 
described in appendix A to part 4044.
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    \14\ 70 FR 72205 at 72206 (Dec. 2, 2005).
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Reasons for Change

    PBGC seeks to ensure that the assumptions described in the benefits 
valuation regulation, in the aggregate, produce annuity valuations 
similar to those produced by private-sector insurers. To do so, PBGC 
attempts to keep its ``assumptions in line with those of private-sector 
insurers, and to modify its mortality assumptions whenever it is 
necessary to do so to achieve consistency with the private insurer 
assumptions.'' \15\ PBGC determined that it could better achieve 
consistency with insurers' mortality assumptions by updating the 
mortality assumptions under the benefits valuation regulation.
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    \15\ See 70 FR 72205, 72206 (Dec. 2, 2005) (quoting 58 FR 5128, 
5129 (Jan. 19, 1993)).
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    PBGC's review of insurance industry practice indicates that 
insurers use fully generational mortality tables rather than the 
simpler static mortality tables used in the current regulation. 
Generational mortality tables are a series of mortality tables, one for 
each year of birth, each of which fully reflects projected trends in 
mortality rates. In addition to achieving better consistency with 
insurers' assumptions, over the past decade, generational mortality 
tables have become widely accepted as best practice in the actuarial 
community. With such projections, actuaries can ``theoretically more 
accurately replicate the anticipated pattern of improvement in 
mortality rates.'' \16\
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    \16\ See Pension Comm, American Academy of Actuaries, Selecting 
and Documenting Mortality Assumptions for Pensions (2015), https://actuary.org/files/Mortality_PN_060515_0.pdf.
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    PBGC's review also indicates that insurers typically use more 
recent base mortality tables than the GAM-94 Basic Table. Similarly, it 
has also become clear that the industry recognizes and distinguishes 
between mortality for annuitants (i.e., individuals receiving benefits) 
and non-annuitants (i.e., terminated vested and active participants).

IRS and Treasury Rulemaking

    The Internal Revenue Service (IRS) and the Treasury Department 
reached the same conclusions regarding trends in mortality assumptions. 
On April 28, 2022, they issued a proposed rule (IRS proposal) \17\ to 
amend their mortality assumptions regulations under section 430(h)(3) 
of the Code. PBGC derived its preamble discussion and operative 
regulatory provisions for its healthy lives mortality assumptions from 
the IRS proposal. On October 20, 2023, IRS and Treasury finalized their 
regulation.\18\
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    \17\ 87 FR 25161 (April 28, 2022).
    \18\ 88 FR 72357 (Oct. 20, 2023).
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Updated Healthy Lives Mortality Assumption--Base Mortality Tables

    This final rule adopts the proposed healthy lives base mortality 
tables. The tables are derived from the tables set forth in the Pri-
2012 Private Retirement Plans Mortality Tables Report published by the 
Retirement Plan Experience Committee (RPEC) of the Society of Actuaries 
(SOA) in 2019 (Pri-2012 Report).\19\ PBGC agrees with IRS and the 
Treasury Department that the Pri-2012 Report is the best available 
study of the actual mortality experience of pension plan participants 
(other than disabled individuals).\20\
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    \19\ This report is available at https://www.soa.org/49c106/globalassets/assets/files/resources/experience-studies/2019/pri-2012-mortality-tables-report.pdf.
    \20\ 87 FR 25161, 25163.
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    The tables in the Pri-2012 Report are gender-distinct and provide 
separate non-annuitant and annuitant mortality rates.\21\ Consistent 
with PBGC's proposed rule, this final rule does not provide separate 
tables for annuitants who are retirees and annuitants who are 
contingent beneficiaries. Rather, it provides annuitant mortality 
tables that combine the mortality experience of retirees and contingent 
beneficiaries. The annuitant mortality tables are used to determine the 
present value of benefits for an annuitant. For a non-annuitant, the 
non-annuitant mortality tables are used for the periods before the 
participant is projected to commence receiving benefits, and the 
annuitant mortality tables are used for later periods. For a 
beneficiary of a participant, the annuitant mortality tables apply for 
the period beginning with each assumed commencement of benefits for the 
participant. If the participant has died (or to the extent the 
participant is assumed to die before commencing benefits), the 
annuitant mortality tables apply for the beneficiary for the period 
beginning with each assumed commencement of benefits for the 
beneficiary.
---------------------------------------------------------------------------

    \21\ The Pri-2012 Report refers to non-annuitant rates as 
``employee'' rates. However, because those rates also apply to 
former employees prior to benefit commencement, for purposes of this 
final rule, the term ``non-annuitant'' is used.
---------------------------------------------------------------------------

    These base tables generally have the same mortality rates as the 
employee and non-disabled annuitant mortality rates that were released 
by RPEC in connection with the Pri-2012 Report. However, the base 
tables provided in this rule also include rates for certain situations 
that were not included in the base tables in the Pri-2012 Report (i.e. 
non-annuitant mortality rates for ages below age 18 and above age 80 
and annuitant mortality rates for ages below age 50). The preamble to 
the IRS proposal describes the methodology that was used to develop 
those additional rates.\22\
---------------------------------------------------------------------------

    \22\ See 87 FR 25161, 25163.
---------------------------------------------------------------------------

    Several commenters made suggestions for the regulation's base 
mortality table. One commenter recommended multi-factor mortality 
tables because, according to the commenter, they better match insurer 
practice and they more precisely predict mortality by using multiple 
data fields to capture the diversity of pension plan mortality by 
analyzing the characteristics of the individuals in those pension 
plans. Multi-factor mortality is an evolving area, which PBGC intends 
to study and monitor as PBGC continues to review ways to improve the 
regulation's prescribed assumptions in the future. Another commenter 
suggested prescribing use of the Society of Actuaries' RP-2014 
Mortality Table instead of Pri-2012. This final rule does not adopt RP-
2014 because, as

[[Page 48296]]

discussed earlier in this preamble, PBGC believes (and one commenter 
agreed) that Pri-2012 is the best available study of the actual 
mortality experience of pension plan participants. Pri-2012 is also 
based on more recent mortality experience than RP-2014 (which is based 
on an experience study for the years 2004-2008).
    PBGC received a few comments about the feasibility of using the 
4044 interest assumption with a different mortality assumption for 
calculations other than those for which the use of both assumptions is 
required. For example, one commenter noted that because of the way the 
4044 yield curve will be determined (i.e., using a current and 
representative mortality assumption to determine the spreads), PBGC's 
discount rate spot yield curve will stand on its own as a reasonable 
assumption for multiple purposes and suggested that for certain 
purposes, such as multiemployer withdrawal liability, the use of a 
``blue collar'' mortality table ``may better reflect the underlying 
demographics of the pension plan being valued.''
    While it is true that, when used together, the 4044 interest and 
mortality assumptions are designed to result in liabilities that are 
similar to what a private-sector insurance company would charge for a 
group annuity contract, PBGC agrees that it may be reasonable to use 
the interest assumption with a different mortality assumption for 
situations where the use of both assumptions is not required (assuming 
the mortality assumption reflects plan demographics).
    With respect to the comment on withdrawal liability, in general, 
PBGC does not mandate use of the 4044 mortality assumption to determine 
withdrawal liability. However, as discussed earlier in this preamble, 
both the prescribed interest and mortality assumptions must be used to 
determine reallocation liability in the event of a mass withdrawal. In 
consideration of the comment, PBGC intends to review the assumptions 
and methods required for such calculations for possible inclusion in a 
future rulemaking project.

Updated Healthy Lives Mortality Assumption--Mortality Improvements

    The base tables described above have a base year of 2012 (the 
central year of the experience study used to develop the mortality 
tables in the Pri-2012 Report). Like the proposed rule, the base tables 
are used to develop the mortality tables for future years using Scale 
MP-2021 Rates (the mortality improvement scale in the Mortality 
Improvement Scale MP-2021 Report,\23\ which was published by the RPEC 
in October 2021). That mortality improvement scale was developed using 
the same underlying methodology used to develop RPEC's earlier 
mortality improvement scales but reflects historical population data 
through 2019 and the change to the RPEC-selected assumptions for the 
long-term rate of mortality improvement that was first incorporated in 
the Mortality Improvement Scale MP-2020 Report.
---------------------------------------------------------------------------

    \23\ Report available at https://www.soa.org/4a9de4/globalassets/assets/files/resources/experience-studies/2021/2021-mp-scale-report.pdf.
---------------------------------------------------------------------------

    Although IRS and Treasury also proposed using Scale MP-2021 for 
future years, their final rule provides for a slightly different 
improvement projection. Because PBGC seeks to match insurance company 
assumptions and has no indication that changes similar to those 
finalized by IRS and Treasury would more closely match insurance 
company assumptions, PBGC is finalizing its mortality improvement scale 
as proposed. PBGC will continue to monitor and consider new mortality 
trend data, including updated mortality improvement scales issued by 
RPEC, and intends to amend its regulation to account for new data when 
appropriate. The updated healthy lives mortality assumptions closely 
align with the mortality assumptions used by private-sector insurers. 
The software needed to use generational mortality tables is widely used 
and is often used for other business needs such as financial 
accounting. Using modern actuarial software, the new assumptions should 
be no more difficult to apply.

Updated Disabled Lives Mortality Assumption

    As with the proposed rule, this final rule provides that the 
healthy lives mortality assumptions (base table and improvement 
projections) be used for disabled individuals that are not eligible for 
Social Security disability benefits. For individuals that are eligible 
for Social Security disability benefits, as with the proposed rule, the 
final rule updates the mortality assumptions to reflect more recent 
mortality experience by using tables published in the Social Security 
Disability Insurance Program Disabled Worker Experience Actuarial Study 
125, a study providing ``extensive information on recent actual [Social 
Security Disability Insurance] disabled worker experience.'' \24\ The 
mortality rates for Social Security disabled participants comprise two 
tables: Table 12 for Social Security disabled participants age 75 and 
younger, and Table 7C for Social Security disabled participants age 76 
and older. As with the current mortality assumptions for individuals 
that are eligible for Social Security disability benefits, the updated 
assumptions do not include a mortality improvement scale.
---------------------------------------------------------------------------

    \24\ Nettie J. Barrick-Funk, Soc. Sec. Admin., Social Security 
Disability Insurance Program Disabled Worker Experience Actuarial 
Study 125, at ix (2020), https://www.ssa.gov/OACT/NOTES/pdf_studies/study125.pdf.
---------------------------------------------------------------------------

    For the reasons discussed earlier, this final rule amends PBGC's 
benefits valuation regulation to replace mortality tables for healthy 
lives with mortality tables from the Pri-2012 Report. It also replaces 
tables relating to mortality improvement for healthy lives with 
references to generational mortality improvement projections from the 
Mortality Improvement Scale MP-2021 and prescribes their use. It 
further amends PBGC's benefits valuation regulation to replace tables 
relating to mortality for Social Security disabled participants with 
tables derived from Social Security Actuarial Study 125. Finally, it 
amends the regulation so that the provisions specifying assumptions for 
non-Social Security disabled lives refer to the healthy lives mortality 
assumptions.

Expense Assumption

Current Assumptions

    Certain administrative expenses are incurred by insurers in 
connection with the payment of benefits. These expenses are for such 
things as establishing plan files, reviewing plan provisions to 
determine benefit entitlements, setting up and updating records, 
processing pension applications, and remitting benefit payments. 
Insurers use assumptions about these expenses to price annuities. To 
account for this component of private-sector annuity pricing, the 
benefits valuation regulation specifies expense assumptions.\25\
---------------------------------------------------------------------------

    \25\ Expense assumptions are sometimes described as loading 
assumptions or expense loading assumptions.
---------------------------------------------------------------------------

    Currently, these expense assumptions are based in part on the total 
present value of plan benefits. They are intended to recognize that the 
computation of benefit valuations entails certain expenses that are 
roughly proportional to the number of participants in a plan, and that 
private insurers' expenses, expressed as a percentage of liabilities, 
are somewhat lower for larger plans. For the expenses proportional to 
the number of plan participants, the benefits valuation regulation 
assumes a cost of $200 per participant. In addition, a percentage of

[[Page 48297]]

liabilities is added to the assumed expense amount for all plans in a 
way that accounts for the efficiency advantage of larger plans. That 
percentage is 5 percent of liabilities up to $200,000, plus a smaller, 
variable percentage of liabilities above $200,000.

Reasons for Change and Updated Expense Assumptions

    As discussed above, PBGC attempts to set its assumptions to match 
the private-sector annuity market. PBGC has determined that simple per-
participant loads are the most common structure for explicitly charging 
for administrative expenses and that insurers' expense assumptions 
account for a very small portion of the total cost of a group annuity. 
PBGC's current multi-tiered expense assumptions are too complicated 
given expense assumptions' small share of annuity pricing and the 
simple structure insurers typically use. Thus, as with the proposed 
rule, this final rule simplifies the expense assumptions. This rule 
sets the expense load assumption at $400 per participant for the first 
100 participants and $250 for each participant over 100. PBGC concluded 
these amounts were reasonable based on a review of per-participant 
charges included in group annuity contracts for terminating plans 
provided to PBGC as part of the standard termination process. These 
amounts will be updated for inflation using the Consumer Price Index 
(CPI-U) each year. The rule amends PBGC's benefits valuation regulation 
to prescribe these updated expense assumptions.
    PBGC received two comments on the proposed expense assumptions. One 
commenter suggested breaking down the expense assumptions between 
deferred and immediate annuities because expenses on deferred annuities 
are higher than on immediate annuities. Though PBGC agrees that 
deferred and immediate annuities have different expense levels, because 
expenses are such a small component of valuations, capturing this 
difference is not worth complicating the assumption. Another commenter 
said PBGC should prescribe a lower expense assumption, yielding 
expenses between 1.5 percent and 1.8 percent. The prescribed expense 
assumption is a dollar amount per participant and will generally result 
in assumed expenses below 1.5 percent of liability.

Conforming Changes to the Missing Participants Regulation

Interest Assumption

    PBGC's Missing Participants regulation (29 CFR part 4050) provides 
that the interest assumption used to determine certain amounts to be 
transferred on behalf of a missing participant from a terminating 
defined benefit plan \26\ to PBGC's Missing Participants Program is the 
interest assumption under PBGC's benefits valuation regulation 
applicable to valuations occurring in January of the calendar year in 
which the benefit determination date occurs.\27\ Under the current 
benefits valuation regulation, the same interest assumption is used for 
any valuation date in January. However, under this final rule, two 
different interest assumptions apply to valuation dates in January 
(i.e., the 4044 yield curve as of December 31 applies for valuation 
dates occurring January 1 through January 30 and the 4044 yield curve 
as of January 31 applies for a January 31 valuation date). If the 
Missing Participants regulation were left unchanged, it would be 
unclear which 4044 yield curve should be used for benefit determination 
dates occurring in a particular calendar year. Thus, like the proposed 
rule, this final rule amends the Missing Participants regulation to 
prescribe the use of the 4044 yield curve applicable to valuations 
occurring on December 31 of the year preceding the calendar year in 
which the benefit determination date occurs. However, there is no 4044 
yield curve applicable to valuations occurring on December 31, 2023. 
Consequentially, for benefit determination dates to which this rule 
applies in 2024, a transition rule prescribes the use of the 4044 yield 
curve applicable to valuations occurring on July 31, 2024.
---------------------------------------------------------------------------

    \26\ The terminating defined benefit plans covered by PBGC's 
Missing Participants Program are single-employer and multiemployer 
pension plans covered by title IV of ERISA, and small professional 
service employer plans not covered by title IV of ERISA. See 29 CFR 
4050.101, 4050.301, and 4050.401.
    \27\ See definition of ``PBGC missing participants assumptions'' 
in 29 CFR 4050.102, 4050.302, and 4050.402.
---------------------------------------------------------------------------

Mortality Assumption

    PBGC's Missing Participants regulation prescribes use of a unisex 
version of the benefit valuation regulation's mortality assumption for 
healthy lives (i.e., a 50/50 blend of the male and female mortality 
tables) to determine certain amounts to be transferred on behalf of a 
missing participant from a terminating defined benefit plan to PBGC's 
Missing Participants Program. Doing the required calculation based on 
the current mortality assumption is relatively straightforward.
    However, because this final rule provides that future mortality 
improvements will be reflected using generational mortality, if the 
Missing Participants regulation were left unchanged, practitioners 
would need to create, and use, a unisex version of a generational 
mortality table, which would be somewhat cumbersome and complicated. To 
alleviate the complication, as with the proposed rule, PBGC is amending 
the Missing Participants regulation to provide that a unisex, static 
version of the mortality table be used for this purpose. More 
specifically, PBGC is amending the portion of the definition of ``PBGC 
missing participants assumptions'' related to mortality to use a 50/50 
blend of static male and female mortality combined tables reflecting 
non-annuitant and annuitant mortality rates. The proposed rule stated 
that these male and female tables would be identical to the static 
mortality tables proposed by IRS and Treasury as an alternative for 
plans with 500 or fewer participants. Though this final rule does not 
change the methodology for determining the missing participants static 
mortality tables, the tables will not be identical to the IRS and 
Treasury small plan tables because of changes to improvement projection 
that IRS and Treasury finalized. This final rule includes the static 
mortality table for 2024 valuations to which this rule applies. PBGC 
intends to amend the regulation annually to provide static mortality 
tables reflecting mortality improvements.

Other Housekeeping Changes

    As previously discussed, the interest, mortality, and expense 
assumptions are specified in appendixes to part 4044. To better align 
with Office of the Federal Register guidance, this final rule specifies 
the updated assumptions within the codified text of part 4044 instead. 
The expected retirement age assumptions, which are also used in present 
value of benefit calculations under part 4044 (but not modified by this 
rule), are moved to codified text as well. This final rule retains the 
current interest assumptions in appendix B for reference, but the other 
three appendixes are removed. The final rule updates cross-references 
to the appendixes throughout PBGC's regulations so that they refer to 
the codified text. Compared to the proposed rule, the final rule 
updates additional cross references in PBGC's regulations

[[Page 48298]]

to reflect the new location of the expected retirement age assumptions.

Applicability and Transition

    One commenter suggested providing a transition period for the 
regulated community to adapt to the new format of the assumptions and 
that PBGC continue publishing select and ultimate interest rates for a 
period of time for third-party use. The amendments apply to 
calculations where the valuation date is on or after July 31, 2024, 
giving adequate time to those that need it. However, PBGC will not 
continue to publish select and ultimate rates. As described earlier in 
the preamble, the select and ultimate methodology is outmoded.

Incorporation by Reference

    Section 4044.53(c)(1)(iii) of the final regulation provides that 
the mortality improvement rates used to construct the generational 
mortality tables to be used are the Scale MP-2021 Rates which are 
described in the Mortality Improvement Scale MP-2021 Report. The Office 
of the Federal Register (OFR) has regulations concerning incorporation 
by reference. 1 CFR part 51. These regulations require that agencies 
must discuss in the preamble to a rule or proposed rule the way in 
which materials that the agency incorporates by reference are 
reasonably available to interested persons, and how interested parties 
can obtain the materials. 1 CFR 51.5(b).
    The Scale MP-2021 Rates and the Mortality Improvement Scale MP-2021 
Report are described in this preamble under the heading ``Updated 
healthy lives mortality assumption--mortality improvements'' in the 
``Mortality Assumption'' section of this preamble. The Mortality 
Improvement Scale MP-2021 Report was issued by the Retirement Plans 
Experience Committee of the Society of Actuaries in October of 2021 and 
is available to the public for free viewing online on the Society of 
Actuary's website at https://www.soa.org/resources/experience-studies/2021/mortality-improvement-scale-mp-2021. The Scale MP-2021 Rates 
consist of tables of mortality improvement rates by age, sex, and year 
that are used to project future mortality improvements on the base 
mortality table.

Executive Orders 12866 and 13563

    The Office of Management and Budget (OMB) has determined that this 
rule is not a ``significant regulatory action'' under Executive Order 
12866. Accordingly, OMB has not reviewed the final rule under Executive 
Order 12866.
    Executive Order 12866 directs agencies to assess all costs and 
benefits of available regulatory alternatives and, if regulation is 
necessary, to select regulatory approaches that maximize net benefits 
(including potential economic, environmental, public health and safety 
effects, distributive impacts, and equity).
    Although this is not a significant regulatory action under 
Executive Order 12866, PBGC has examined the economic implications of 
this final rule and has concluded that the rule's changes will have a 
minimal impact on liabilities determined under PBGC's regulations.
    The updates to the assumptions under the benefits valuation 
regulation will, on average, produce benefit liabilities that are very 
close to the valuations produced by the current assumptions. The 
results for any particular benefit valuation, however, could be 
different as a result of adopting an interest rate methodology based on 
market rates (i.e., eliminating the lag between when data used to set 
the interest assumption are observed and the interest rate environment 
on the valuation date).
    The impact on liabilities resulting from eliminating the above-
noted lag will not be biased in favor of higher or lower benefit 
liabilities. Also, the impact should be fairly small (i.e., within a 
few percentage points) unless market rates on the valuation date are 
significantly different from what PBGC would have used to determine the 
4044 interest assumption absent this change (i.e., had the lag not been 
eliminated).
    PBGC's analysis indicates that, ignoring the impact of the interest 
rate timing difference described in the prior paragraph, the impact 
will also be relatively small in situations where the updated 4044 
interest assumption is used, but not the updated 4044 mortality 
assumption. For example, this might be the case with respect to certain 
withdrawal liability calculations. For plans using the 4044 interest 
assumption but not the 4044 mortality assumption to determine 
withdrawal liability, the updated assumptions will generally result in 
lower benefit liabilities, but liability measurements should be within 
a few percentage points of liability measurements using the current 
methodology. Thus, the change will result in only a minor change in 
withdrawal liability.
    The changes to generational mortality tables and to a yield-curve 
based interest assumption impose a small and not significant 
administrative burden on plans and practitioners that do calculations 
using the assumptions.
    Section 6 of Executive Order 13563 requires agencies to rethink 
existing regulations by periodically reviewing their regulatory 
programs for rules that ``may be outmoded, ineffective, insufficient, 
or excessively burdensome.'' These rules should be modified, 
streamlined, expanded, or repealed as appropriate. PBGC is updating 
certain outmoded assumptions in its benefits valuation regulation 
consistent with the principles for review under E.O. 13563.

Regulatory Flexibility Act

    The Regulatory Flexibility Act \28\ imposes certain requirements 
respecting rules that are subject to the notice-and-comment 
requirements of section 553(b) of the Administrative Procedure Act, or 
any other law,\29\ and that are likely to have a significant economic 
impact on a substantial number of small entities. Unless an agency 
certifies that a final rule is not likely to have a significant 
economic impact on a substantial number of small entities, section 604 
of the Regulatory Flexibility Act requires that the agency present a 
final regulatory flexibility analysis at the time of the publication of 
the final rule describing the impact of the rule on small entities and 
seek public comment on such impact. Small entities include small 
businesses, organizations, and governmental jurisdictions.\30\
---------------------------------------------------------------------------

    \28\ 5 U.S.C. 601 et seq.
    \29\ The applicable definition of ``rule'' is found in section 
601 of the Regulatory Flexibility Act. See 5 U.S.C. 601(2).
    \30\ The applicable definitions of ``small business,'' ``small 
organization,'' and ``small governmental jurisdiction'' are found in 
section 601 of the Regulatory Flexibility Act. See 5 U.S.C. 601.
---------------------------------------------------------------------------

    For purposes of the Regulatory Flexibility Act requirements with 
respect to this final rule, PBGC considers a small entity to be a plan 
with fewer than 100 participants.\31\ This is substantially the same 
criterion PBGC uses in other regulations \32\ and is consistent with 
certain requirements in title I of ERISA \33\ and the Code,\34\ as well 
as the definition of a small entity that PBGC and the Department of 
Labor

[[Page 48299]]

(DOL) have used for purposes of the Regulatory Flexibility Act.\35\
---------------------------------------------------------------------------

    \31\ PBGC consulted with the Small Business Administration's 
Office of Advocacy before making this determination. Memorandum 
received from the U.S. Small Business Administration, Office of 
Advocacy on March 9, 2021.
    \32\ See, e.g., special rules for small plans under part 4007 
(Payment of Premiums).
    \33\ See, e.g., section 104(a)(2) of ERISA, which permits the 
Secretary of Labor to prescribe simplified annual reports for 
pension plans that cover fewer than 100 participants.
    \34\ See, e.g., section 430(g)(2)(B) of the Code, which permits 
plans with 100 or fewer participants to use valuation dates other 
than the first day of the plan year.
    \35\ See, e.g., PBGC's proposed rule on Reportable Events and 
Certain Other Notification Requirements, 78 FR 20039, 20057 (April 
3, 2013) and DOL's final rule on Procedures Governing the Filing and 
Processing of Prohibited Transaction Exemption Applications, 89 FR 
4662, 4690 (Jan. 24, 2024).
---------------------------------------------------------------------------

    Further, while some large employers operate small plans along with 
larger ones, in general, most small plans are maintained by small 
employers. Thus, PBGC believes that assessing the impact of the final 
rule on small plans is an appropriate substitute for evaluating the 
effect on small entities. The definition of small entity considered 
appropriate for this purpose differs, however, from a definition of 
small business based on size standards promulgated by the Small 
Business Administration \36\ under the Small Business Act. PBGC 
therefore requested comments on the appropriateness of the size 
standard used in evaluating the impact of the amendments in the final 
rule on small entities. PBGC received no comments on this point.
---------------------------------------------------------------------------

    \36\ See, 13 CFR 121.201.
---------------------------------------------------------------------------

    Based on its definition of small entity, PBGC certifies under 
Section 605(b) of the Regulatory Flexibility Act (5 U.S.C. 601 et seq.) 
that the amendments in this final rule will not have a significant 
economic impact on a substantial number of small entities. As explained 
earlier in this preamble, the assumptions will continue to produce 
valuations that align with group annuity prices. Because of this, PBGC 
does not expect the assumptions to have a significant economic impact 
on a substantial number of entities of any size. Similarly, because 
technology improvements allow even small plans (and their service 
providers) to apply the more complicated interest and mortality 
assumptions of this rule without additional administrative burden, this 
final rule will not increase administrative costs on these entities. 
Accordingly, as provided in Section 605 of the Regulatory Flexibility 
Act, sections 603 and 604 do not apply.

List of Subjects

29 CFR Part 4001

    Employee benefit plans, Pension insurance, Pensions.

29 CFR Part 4010

    Pension insurance, Pensions, Reporting and recordkeeping 
requirements.

29 CFR Part 4022

    Employee benefit plans, Pension insurance, Pensions, Reporting and 
recordkeeping requirements.

29 CFR Part 4041

    Employee benefit plans, Pension insurance, Pensions, Reporting and 
recordkeeping requirements.

29 CFR Part 4041A

    Employee benefit plans, Pension insurance, Pensions, Reporting and 
recordkeeping requirements.

29 CFR Part 4043

    Employee benefit plans, Pension insurance, Pensions, Reporting and 
recordkeeping requirements.

29 CFR Part 4044

    Employee benefit plans, Incorporation by reference, Pension 
insurance, Pensions.

29 CFR Part 4050

    Employee benefit plans, Pension insurance, Pensions, Reporting and 
recordkeeping requirements.

29 CFR Part 4262

    Employee benefit plans, Pension insurance, Pensions, Reporting and 
recordkeeping requirements.

29 CFR Part 4281

    Employee benefit plans, Pension insurance, Reporting and 
recordkeeping requirements.

    For the reasons stated in the preamble, PBGC amends 29 CFR parts 
4001, 4010, 4022, 4041, 4041A, 4043, 4044, 4050, 4262, and 4281 as 
follows:

PART 4001--TERMINOLOGY

0
1. The authority citation for part 4001 continues to read as follows:

    Authority:  29 U.S.C. 1301, 1302(b)(3).


Sec.  4001.2  [Amended]

0
2. Amend Sec.  4001.2 in the definition of Expected retirement age 
(XRA) by removing ``Sec. Sec.  4044.55 through 4044.57'' and adding in 
its place ``Sec. Sec.  4044.55 through 4044.58''.

PART 4010--BENEFITS PAYABLE IN TERMINATED SINGLE-EMPLOYER PLANS

0
3. The authority citation for part 4010 continues to read as follows:

    Authority:  29 U.S.C. 1302(b)(3), 1310.


0
4. Amend Sec.  4010.8 in table 1 to paragraph (d)(2)(ii) under 
``Assumptions'' by revising the entry for ``Interest'' and under 
``Decrements'' by revising the entry for ``Retirement'' to read as 
follows:


Sec.  4010.8  Plan actuarial information.

* * * * *
    (d) * * *
    (2) * * *
    (ii) * * *

                     Table 1 to Paragraph (d)(2)(ii)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
Assumptions:                            * * *
 
                                * * * * *
  Interest............................  Sec.   4044.54.
 
                                * * * * *
    Decrements
   Retirement.................  Sec.  Sec.   4044.55 through
                                         4044.58.
 
                                * * * * *
------------------------------------------------------------------------

* * * * *

PART 4022--BENEFITS PAYABLE IN TERMINATED SINGLE-EMPLOYER PLANS

0
5. 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
6. Amend Sec.  4022.63 in paragraphs (b) introductory text by:
0
a. Removing the words ``the PBGC'' and adding in their place the word 
``PBGC'' wherever they appear; and
0
b. Revising paragraph (b)(1).
    The revision reads as follows:


Sec.  4022.63  Estimated asset-funded benefit.

* * * * *
    (b) * * *
    (1) An actuarial valuation of the plan has been performed for a 
plan year beginning not more than eighteen months before the proposed 
termination date. If the interest rate used to value plan liabilities 
in this valuation exceeded the applicable valuation interest rates and 
factors under Sec.  4044.54 of this chapter in effect on the proposed 
termination date, the value of benefits in pay status and the value of 
vested benefits not in pay status on the valuation date must be 
converted to PBGC's valuation rates and factors.
* * * * *

PART 4041--TERMINATION OF SINGLE-EMPLOYER PLANS

0
7. The authority citation for part 4041 continues to read as follows:

    Authority:  29 U.S.C. 1302(b)(3), 1341, 1344, 1350.


Sec.  4041.49  [Amended]

0
8. Amend Sec.  4041.49 in paragraph (b)(1)(ii) by removing ``Sec. Sec.  
4044.41

[[Page 48300]]

through 4044.57'' and adding in its place ``Sec. Sec.  4044.41 through 
4044.58''.

PART 4041A--TERMINATION OF MULTIEMPLOYER PLANS

0
9. The authority citation for part 4041A continues to read as follows:

    Authority: 29 U.S.C. 1302(b)(3), 1341a, 1431, 1441.


Sec.  4041A.43  [Amended]

0
10. Amend Sec.  4041A.43 in paragraph (b)(1) by removing ``Sec. Sec.  
4044.41 through 4044.57'' and adding in its place ``Sec. Sec.  4044.41 
through 4044.58''.

PART 4043--REPORTABLE EVENTS AND CERTAIN OTHER NOTIFICATION 
REQUIREMENTS

0
11. The authority citation for part 4043 continues to read as follows:

    Authority:  29 U.S.C. 1083(k), 1302(b)(3), 1343.


Sec.  4043.65  [Amended]

0
12. Amend Sec.  4043.65 in paragraphs (b)(3) and (4) by removing 
``Sec. Sec.  4044.51 through 4044.57'' and adding in its place 
``Sec. Sec.  4044.51 through 4044.58'' wherever it occurs.

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

0
13. The authority citation for part 4044 continues to read as follows:

    Authority: 29 U.S.C. 1301(a), 1302(b)(3), 1341, 1344, 1362.


Sec.  4044.1  [Amended]

0
14. Amend Sec.  4044.1 in the second sentence of paragraph (b)(1) by 
removing ``Sections 4044.51 through 4044.57'' and adding in its place 
``Sections 4044.51 through 4044.58'' and by removing ``(Sec. Sec.  
4044.55 through 4044.57)'' and adding in its place ``(Sec. Sec.  
4044.55 through 4044.58)''.


Sec.  4044.2  [Amended]

0
15. Amend Sec.  4044.2 in paragraph (d) introductory text by removing 
``Sec. Sec.  4044.55 through 4044.57'' and adding in its place 
``Sec. Sec.  4044.55 through 4044.58''.


Sec.  4044.41  [Amended]

0
16. Amend Sec.  4044.41 in paragraphs (a)(1) and (2) by removing 
``Sec. Sec.  4044.51 through 4044.57'' and adding in its place 
``Sec. Sec.  4044.51 through 4044.58''.


Sec.  4044.51  [Amended]

0
17. Amend Sec.  4044.51 in paragraph (b)(2)(i) by removing ``Sec. Sec.  
4044.55 through 4044.57'' and adding in its place ``Sec. Sec.  4044.55 
through 4044.58''.

0
18. Amend Sec.  4044.52 by revising paragraphs (a) and (d) to read as 
follows:


Sec.  4044.52  Valuation of benefits.

* * * * *
    (a) Using the mortality assumptions prescribed by Sec.  4044.53 and 
the interest assumptions prescribed by Sec.  4044.54;
* * * * *
    (d) Adding an expense loading charge determined in accordance with 
this paragraph (d) to the total value of benefits.
    (1) Expense loading charge. The expense loading charge equals the 
applicable inflation multiplier determined in accordance with paragraph 
(d)(2) of this section multiplied by the sum of--
    (i) Four hundred dollars ($400) multiplied by the lesser of the 
applicable participant count and 100, and
    (ii) Two hundred-fifty dollars ($250) multiplied by the excess, if 
any, of the applicable participant count over 100.
    (2) Applicable inflation multiplier. Except as provided in the next 
sentence, the applicable inflation multiplier equals the value of the 
CPI-U for September of the year preceding the year containing the 
valuation date divided by 296.808 (the value of the CPI-U for September 
of 2022), but not less than 1. However, for a valuation date on any day 
in January except the 31st, the applicable inflation multiplier is 
determined as if the valuation date were December 31 of the year 
preceding the year containing the valuation date. The term ``CPI-U'' 
means the Consumer Price Index for All Urban Consumers, not seasonally 
adjusted as published by the Bureau of Labor Statistics of the 
Department of Labor.
    (3) Rounding. Any expense loading charge determined in accordance 
with this paragraph (d) which is not a multiple of $1.00 is rounded to 
the nearest dollar.

0
19. Amend Sec.  4044.53 by revising paragraphs (c), (d), and (e) and 
adding paragraph (h) to read as follows:


Sec.  4044.53  Mortality assumptions.

* * * * *
    (c) Healthy lives--(1) In general. If the individual is not 
disabled under paragraph (f) of this section, the plan administrator 
must value the benefit using generational mortality tables described in 
this paragraph (c).
    (i) Construction of generational mortality tables. The generational 
mortality tables in this paragraph (c) are constructed from the base 
mortality tables described in paragraph (c)(1)(ii) of this section and 
the mortality improvement rates described in paragraph (c)(1)(iii) of 
this section.
    (ii) Base mortality tables. The base mortality tables are set forth 
in paragraph (c)(5) of this section. The base year for those tables is 
2012.
    (iii) Mortality improvement rates. The mortality improvement rates 
are the Scale MP-2021 Rates described in the Mortality Improvement 
Scale MP-2021 Report.
    (iv) Incorporation by reference. The Mortality Improvement Scale 
MP-2021 Report, October 2021 is incorporated by reference into this 
section with the approval of the Director of the Federal Register under 
5 U.S.C. 552(a) and 1 CFR part 51. This incorporation by reference 
(IBR) material is available for inspection at PBGC and at the National 
Archives and Records Administration (NARA). Contact PBGC at: Disclosure 
Division, Office of the General Counsel, Pension Benefit Guaranty 
Corporation; 445 12th Street SW, Washington, DC 20024; 202-326-4040. 
For information on the availability of this material at NARA, visit 
www.archives.gov/federal-register/cfr/ibr-locations.html or email 
[email protected]. The material may be obtained from the Society 
of Actuaries at: Society of Actuaries, 475 N. Martingale Rd., Suite 
600, Schaumburg, IL 60173; (847) 706-3500; https://www.soa.org/resources/experience-studies/2021/mortality-improvement-scale-mp-2021.
    (2) Application of mortality improvement rates--(i) In general. 
Under the generational mortality tables described in this paragraph 
(c), the probability of an individual's death at a particular age in 
the future is determined as the individual's base mortality rate that 
applies at that age (that is, the applicable mortality rate from the 
tables set forth in paragraph (c)(5) of this section for that age, 
gender, and status as an annuitant or a non-annuitant) multiplied by 
the cumulative mortality improvement factor for the individual's gender 
and for that age for the period from 2012 through the calendar year in 
which the individual is projected to reach the particular age. 
Paragraph (c)(3) of this section provides an example that illustrates 
how the base mortality tables in paragraph (c)(5) of this section and 
the Scale MP-2021 mortality improvement rates are combined to determine 
projected mortality rates.
    (ii) Cumulative mortality improvement factor. The cumulative 
mortality improvement factor for an age and gender for a period is the 
product of the annual mortality improvement factors for that age and 
gender for each year within that period.

[[Page 48301]]

    (iii) Annual mortality improvement factor. The annual mortality 
improvement factor for an age and gender for a year is 1 minus the 
mortality improvement rate that applies for that age and gender for 
that year. If that annual mortality improvement rate is greater than 1 
(corresponding to a negative mortality improvement rate), then the 
projected mortality rate for that age and gender for that year is 
greater than the projected mortality rate for the same age and gender 
for the preceding year.
    (3) Example of calculation using scale MP-2021 rates--(i) 
Calculation of mortality rate. The mortality rate that is applied to 
male annuitants who are age 67 in 2024 is equal to the product of the 
mortality rate for 2012 that applied to male annuitants who were age 67 
in 2012 (0.01288) and the cumulative mortality improvement factor for 
age 67 males from 2012 to 2024. The cumulative mortality improvement 
factor for age 67 males for the period from 2012 to 2024 is 0.9867, and 
the mortality rate for 2024 for male annuitants who are age 67 in that 
year would be 0.01271, as shown in the following table.

                       Table 1 to Paragraph (c)(3)(i)--Example Mortality Rate Calculation
----------------------------------------------------------------------------------------------------------------
                                                       Annual mortality
                                     Scale MP-2021    improvement factor      Cumulative
          Calendar year                mortality         (1-mortality          mortality        Mortality rate
                                   improvement rate    improvement rate)  improvement factor
----------------------------------------------------------------------------------------------------------------
2012............................                 n/a                 n/a                 n/a             0.01288
2013............................              0.0052              0.9948              0.9948  ..................
2014............................              0.0027              0.9973              0.9921  ..................
2015............................              0.0009              0.9991              0.9912  ..................
2016............................            (0.0003)              1.0003              0.9915  ..................
2017............................            (0.0010)              1.0010              0.9925  ..................
2018............................            (0.0016)              1.0016              0.9941  ..................
2019............................            (0.0016)              1.0016              0.9957  ..................
2020............................            (0.0010)              1.0010              0.9967  ..................
2021............................              0.0000              1.0000              0.9967  ..................
2022............................              0.0015              0.9985              0.9952  ..................
2023............................              0.0033              0.9967              0.9919  ..................
2024............................              0.0052              0.9948              0.9867             0.01271
----------------------------------------------------------------------------------------------------------------

    (ii) Probability of survival for an individual. After the projected 
mortality rates are derived for each age for each year, the rates are 
used to calculate the present value of a benefit stream that depends on 
the probability of survival year-by-year. For example, using the Scale 
MP-2021 rates, for purposes of calculating the present value of future 
payments in a benefit stream payable for a male annuitant who is age 67 
in 2024, the probability of survival for the annuitant is based on the 
mortality rate for a male annuitant who is age 67 in 2024 (0.01271), 
and the projected mortality rate for a male annuitant who will be age 
68 in 2025 (0.01369), age 69 in 2026 (0.01478), and so on.
    (4) Use of the tables--(i) Separate tables for annuitants and non-
annuitants. Separate mortality tables are provided for use for 
annuitants and non-annuitants. The non-annuitant mortality tables are 
applied to determine the probability of survival for a non-annuitant 
for the period before the non-annuitant is projected to commence 
receiving benefits. The annuitant mortality tables are applied to 
determine the present value of benefits for each annuitant. In 
addition, the annuitant mortality tables are applied for each non-
annuitant with respect to each assumed commencement of benefits for the 
period beginning with that assumed commencement. For purposes of this 
section, an annuitant means a plan participant who has commenced 
receiving benefits, and a non-annuitant means a plan participant who 
has not yet commenced receiving benefits (for example, an active 
employee or a terminated vested participant). A participant whose 
benefit has partially commenced is treated as an annuitant for the 
portion of the benefit that has commenced and treated as a non-
annuitant for the balance of the benefit. In addition, for a 
beneficiary of a participant, the annuitant mortality tables apply for 
the period beginning with each assumed commencement of benefits for the 
participant. If the participant has died (or to the extent the 
participant is assumed to die before commencing benefits), the 
annuitant mortality tables apply with respect to the beneficiary for 
the period beginning with each assumed commencement of benefits for the 
beneficiary.
    (ii) Examples of calculation using separate non-annuitant and 
annuitant tables. For a 45-year-old active participant who is projected 
to commence receiving an annuity at age 55, benefit liabilities are 
determined using the non-annuitant mortality tables for the period 
before the participant attains age 55 and using the annuitant mortality 
tables for the period ages 55 and above. Similarly, for a 45-year-old 
terminated vested participant who is projected to commence an annuity 
at age 65, benefit liabilities are determined using the non-annuitant 
mortality tables for the period before the participant attains age 65 
and using the annuitant mortality tables for ages 65 and above.
    (5) Base mortality tables. The following are the base mortality 
tables. The base year for these tables is 2012.

                         Table 2 to Paragraph (c)(5)--Healthy Lives Base Mortality Table
----------------------------------------------------------------------------------------------------------------
                                                   Males                                  Females
               Age               -------------------------------------------------------------------------------
                                     Non-annuitant         Annuitant         Non-annuitant         Annuitant
----------------------------------------------------------------------------------------------------------------
0...............................             0.00650             0.00650             0.00544             0.00544

[[Page 48302]]

 
1...............................             0.00045             0.00045             0.00038             0.00038
2...............................             0.00030             0.00030             0.00023             0.00023
3...............................             0.00022             0.00022             0.00018             0.00018
4...............................             0.00019             0.00019             0.00013             0.00013
5...............................             0.00016             0.00016             0.00012             0.00012
6...............................             0.00014             0.00014             0.00011             0.00011
7...............................             0.00013             0.00013             0.00010             0.00010
8...............................             0.00011             0.00011             0.00009             0.00009
9...............................             0.00009             0.00009             0.00009             0.00009
10..............................             0.00008             0.00008             0.00009             0.00009
11..............................             0.00009             0.00009             0.00009             0.00009
12..............................             0.00013             0.00013             0.00010             0.00010
13..............................             0.00017             0.00017             0.00012             0.00012
14..............................             0.00022             0.00022             0.00013             0.00013
15..............................             0.00028             0.00028             0.00013             0.00013
16..............................             0.00034             0.00034             0.00014             0.00014
17..............................             0.00040             0.00040             0.00015             0.00015
18..............................             0.00046             0.00046             0.00015             0.00015
19..............................             0.00053             0.00053             0.00015             0.00015
20..............................             0.00056             0.00056             0.00015             0.00015
21..............................             0.00056             0.00056             0.00015             0.00015
22..............................             0.00056             0.00056             0.00016             0.00016
23..............................             0.00055             0.00055             0.00018             0.00018
24..............................             0.00055             0.00055             0.00019             0.00019
25..............................             0.00054             0.00054             0.00019             0.00019
26..............................             0.00054             0.00054             0.00019             0.00019
27..............................             0.00054             0.00054             0.00020             0.00020
28..............................             0.00054             0.00054             0.00020             0.00020
29..............................             0.00054             0.00054             0.00020             0.00020
30..............................             0.00055             0.00055             0.00021             0.00021
31..............................             0.00055             0.00055             0.00022             0.00022
32..............................             0.00056             0.00056             0.00023             0.00023
33..............................             0.00058             0.00058             0.00025             0.00025
34..............................             0.00059             0.00059             0.00026             0.00026
35..............................             0.00061             0.00061             0.00028             0.00028
36..............................             0.00063             0.00063             0.00031             0.00031
37..............................             0.00065             0.00065             0.00034             0.00034
38..............................             0.00068             0.00068             0.00036             0.00036
39..............................             0.00071             0.00071             0.00040             0.00040
40..............................             0.00074             0.00074             0.00043             0.00043
41..............................             0.00077             0.00082             0.00047             0.00049
42..............................             0.00081             0.00099             0.00051             0.00061
43..............................             0.00086             0.00124             0.00055             0.00078
44..............................             0.00091             0.00158             0.00060             0.00101
45..............................             0.00097             0.00200             0.00065             0.00130
46..............................             0.00105             0.00251             0.00071             0.00165
47..............................             0.00113             0.00310             0.00077             0.00206
48..............................             0.00123             0.00378             0.00083             0.00252
49..............................             0.00134             0.00454             0.00090             0.00304
50..............................             0.00147             0.00539             0.00098             0.00362
51..............................             0.00161             0.00544             0.00107             0.00426
52..............................             0.00177             0.00565             0.00116             0.00495
53..............................             0.00194             0.00588             0.00126             0.00500
54..............................             0.00213             0.00616             0.00137             0.00512
55..............................             0.00234             0.00647             0.00148             0.00517
56..............................             0.00257             0.00686             0.00161             0.00522
57..............................             0.00281             0.00728             0.00175             0.00528
58..............................             0.00308             0.00770             0.00190             0.00561
59..............................             0.00338             0.00811             0.00206             0.00601
60..............................             0.00369             0.00848             0.00224             0.00643
61..............................             0.00403             0.00882             0.00243             0.00690
62..............................             0.00441             0.00918             0.00264             0.00743
63..............................             0.00481             0.00960             0.00287             0.00796
64..............................             0.00525             0.01014             0.00312             0.00859
65..............................             0.00573             0.01087             0.00339             0.00928
66..............................             0.00636             0.01178             0.00380             0.01003
67..............................             0.00706             0.01288             0.00427             0.01089
68..............................             0.00784             0.01418             0.00480             0.01192
69..............................             0.00870             0.01564             0.00540             0.01309
70..............................             0.00967             0.01729             0.00606             0.01444

[[Page 48303]]

 
71..............................             0.01073             0.01914             0.00681             0.01597
72..............................             0.01192             0.02121             0.00765             0.01770
73..............................             0.01323             0.02354             0.00860             0.01967
74..............................             0.01469             0.02613             0.00966             0.02192
75..............................             0.01632             0.02905             0.01085             0.02445
76..............................             0.01812             0.03233             0.01219             0.02727
77..............................             0.02012             0.03604             0.01370             0.03042
78..............................             0.02234             0.04026             0.01539             0.03391
79..............................             0.02480             0.04504             0.01729             0.03775
80..............................             0.02754             0.05046             0.01943             0.04198
81..............................             0.02989             0.05657             0.02134             0.04663
82..............................             0.03460             0.06343             0.02516             0.05178
83..............................             0.04166             0.07114             0.03089             0.05754
84..............................             0.05108             0.07977             0.03853             0.06401
85..............................             0.06285             0.08946             0.04808             0.07132
86..............................             0.07698             0.10032             0.05955             0.07954
87..............................             0.09346             0.11248             0.07293             0.08879
88..............................             0.11229             0.12600             0.08822             0.09936
89..............................             0.13348             0.14088             0.10542             0.11124
90..............................             0.15703             0.15703             0.12453             0.12453
91..............................             0.17401             0.17401             0.13818             0.13818
92..............................             0.19151             0.19151             0.15250             0.15250
93..............................             0.20936             0.20936             0.16737             0.16737
94..............................             0.22742             0.22742             0.18274             0.18274
95..............................             0.24569             0.24569             0.19863             0.19863
96..............................             0.26415             0.26415             0.21509             0.21509
97..............................             0.28281             0.28281             0.23214             0.23214
98..............................             0.30169             0.30169             0.24983             0.24983
99..............................             0.32077             0.32077             0.26814             0.26814
100.............................             0.33996             0.33996             0.28698             0.28698
101.............................             0.35910             0.35910             0.30619             0.30619
102.............................             0.37794             0.37794             0.32549             0.32549
103.............................             0.39633             0.39633             0.34472             0.34472
104.............................             0.41415             0.41415             0.36375             0.36375
105.............................             0.43131             0.43131             0.38243             0.38243
106.............................             0.44771             0.44771             0.40065             0.40065
107.............................             0.46329             0.46329             0.41828             0.41828
108.............................             0.47800             0.47800             0.43522             0.43522
109.............................             0.49181             0.49181             0.45139             0.45139
110.............................             0.50000             0.50000             0.46673             0.46673
111.............................             0.50000             0.50000             0.48120             0.48120
112.............................             0.50000             0.50000             0.49477             0.49477
113.............................             0.50000             0.50000             0.50000             0.50000
114.............................             0.50000             0.50000             0.50000             0.50000
115.............................             0.50000             0.50000             0.50000             0.50000
116.............................             0.50000             0.50000             0.50000             0.50000
117.............................             0.50000             0.50000             0.50000             0.50000
118.............................             0.50000             0.50000             0.50000             0.50000
119.............................             0.50000             0.50000             0.50000             0.50000
120.............................             1.00000             1.00000             1.00000             1.00000
----------------------------------------------------------------------------------------------------------------

    (d) Social Security disabled lives. If the individual is Social 
Security disabled under paragraph (f)(1) of this section, the plan 
administrator will value the benefit using the following table.

Table 3 to Paragraph (d)--Social Security Disabled Lives Mortality Table
------------------------------------------------------------------------
                      Age                           Male        Female
------------------------------------------------------------------------
16............................................     0.012544     0.004759
17............................................     0.007102     0.006541
18............................................     0.005859     0.008035
19............................................     0.009998     0.008369
20............................................     0.008926     0.009224
21............................................     0.008533     0.008144
22............................................     0.008158     0.008616
23............................................     0.008970     0.008127
24............................................     0.008433     0.008318
25............................................     0.008696     0.008851
26............................................     0.009211     0.008002
27............................................     0.009362     0.008694
28............................................     0.009780     0.009477
29............................................     0.010049     0.009664
30............................................     0.011093     0.009417
31............................................     0.011075     0.009985
32............................................     0.010931     0.010524
33............................................     0.011890     0.010648
34............................................     0.012529     0.011252
35............................................     0.012418     0.011450
36............................................     0.013234     0.011448
37............................................     0.013832     0.012135

[[Page 48304]]

 
38............................................     0.014457     0.012579
39............................................     0.015830     0.012619
40............................................     0.016153     0.013578
41............................................     0.016859     0.014243
42............................................     0.017464     0.014520
43............................................     0.018302     0.014773
44............................................     0.019127     0.015630
45............................................     0.020380     0.016131
46............................................     0.021607     0.016874
47............................................     0.023407     0.017547
48............................................     0.023956     0.018198
49............................................     0.025631     0.019281
50............................................     0.026384     0.019413
51............................................     0.027277     0.020343
52............................................     0.028582     0.020488
53............................................     0.030164     0.021316
54............................................     0.031262     0.021960
55............................................     0.031728     0.021969
56............................................     0.033067     0.022897
57............................................     0.034230     0.023556
58............................................     0.035474     0.024159
59............................................     0.036790     0.024958
60............................................     0.037772     0.025905
61............................................     0.039297     0.027414
62............................................     0.039954     0.028394
63............................................     0.041069     0.029795
64............................................     0.042280     0.030776
65............................................     0.039144     0.028230
66............................................     0.043862     0.031667
67............................................     0.046182     0.033318
68............................................     0.048624     0.034728
69............................................     0.052077     0.037341
70............................................     0.055284     0.039491
71............................................     0.058951     0.042134
72............................................     0.062301     0.044962
73............................................     0.067099     0.047548
74............................................     0.071469     0.051148
75............................................     0.075068     0.055271
76............................................     0.080425     0.059382
77............................................     0.085531     0.063489
78............................................     0.091585     0.068675
79............................................     0.098383     0.074929
80............................................     0.104788     0.080536
81............................................     0.113110     0.088455
82............................................     0.122062     0.094573
83............................................     0.131697     0.103589
84............................................     0.140430     0.111345
85............................................     0.151890     0.122160
86............................................     0.165777     0.130844
87............................................     0.176875     0.142631
88............................................     0.188397     0.156112
89............................................     0.206651     0.166591
90............................................     0.223252     0.182064
91............................................     0.235073     0.197059
92............................................     0.249318     0.205768
93............................................     0.267740     0.225325
94............................................     0.277033     0.240441
95............................................     0.284003     0.260724
96............................................     0.298740     0.281817
97............................................     0.313086     0.293156
98............................................     0.328740     0.308400
99............................................     0.345177     0.324436
100...........................................     0.362436     0.341307
101...........................................     0.380558     0.359055
102...........................................     0.399586     0.377726
103...........................................     0.419565     0.397368
104...........................................     0.440543     0.418031
105...........................................     0.462571     0.439768
106...........................................     0.485699     0.462636
107...........................................     0.509984     0.486693
108...........................................     0.535483     0.512001
109...........................................     0.562257     0.538626
110...........................................     0.590370     0.566634
111+..........................................     1.000000     1.000000
------------------------------------------------------------------------

    (e) Non-Social Security disabled lives. If the individual is non-
Social Security disabled under paragraph (f)(2) of this section, the 
plan administrator will value the benefit using generational mortality 
tables described in paragraph (c) of this section.
* * * * *
    (h) Missing participants mortality. The following mortality table 
is used to value benefits using ``PBGC missing participants 
assumptions'' under part 4050, subparts A, C, and D of this chapter.

         Table 4 to Paragraph (h)--Missing Participants Mortality Table for Determination Dates in 2024
----------------------------------------------------------------------------------------------------------------
                   Age                       Unisex mortality                Age               Unisex mortality
----------------------------------------------------------------------------------------------------------------
0........................................             0.00207   61..........................             0.00370
1........................................             0.00015   62..........................             0.00441
2........................................             0.00010   63..........................             0.00514
3........................................             0.00008   64..........................             0.00577
4........................................             0.00006   65..........................             0.00658
5........................................             0.00006   66..........................             0.00748
6........................................             0.00005   67..........................             0.00834
7........................................             0.00005   68..........................             0.00928
8........................................             0.00004   69..........................             0.01034
9........................................             0.00004   70..........................             0.01155
10.......................................             0.00004   71..........................             0.01294
11.......................................             0.00004   72..........................             0.01452
12.......................................             0.00005   73..........................             0.01631
13.......................................             0.00006   74..........................             0.01837
14.......................................             0.00008   75..........................             0.02073
15.......................................             0.00009   76..........................             0.02345
16.......................................             0.00010   77..........................             0.02656
17.......................................             0.00012   78..........................             0.03012
18.......................................             0.00014   79..........................             0.03417
19.......................................             0.00016   80..........................             0.03899
20.......................................             0.00016   81..........................             0.04395
21.......................................             0.00017   82..........................             0.04959
22.......................................             0.00017   83..........................             0.05595
23.......................................             0.00018   84..........................             0.06317
24.......................................             0.00019   85..........................             0.07138
25.......................................             0.00020   86..........................             0.08063
26.......................................             0.00021   87..........................             0.09107
27.......................................             0.00022   88..........................             0.10286
28.......................................             0.00023   89..........................             0.11596
29.......................................             0.00023   90..........................             0.13036
30.......................................             0.00025   91..........................             0.14540
31.......................................             0.00026   92..........................             0.16090
32.......................................             0.00028   93..........................             0.17679
33.......................................             0.00030   94..........................             0.19284

[[Page 48305]]

 
34.......................................             0.00032   95..........................             0.20898
35.......................................             0.00034   96..........................             0.22620
36.......................................             0.00036   97..........................             0.24386
37.......................................             0.00038   98..........................             0.26196
38.......................................             0.00040   99..........................             0.28059
39.......................................             0.00043   100.........................             0.29960
40.......................................             0.00044   101.........................             0.31891
41.......................................             0.00046   102.........................             0.33825
42.......................................             0.00048   103.........................             0.35757
43.......................................             0.00049   104.........................             0.37670
44.......................................             0.00052   105.........................             0.39521
45.......................................             0.00054   106.........................             0.41327
46.......................................             0.00058   107.........................             0.43080
47.......................................             0.00061   108.........................             0.44743
48.......................................             0.00065   109.........................             0.46339
49.......................................             0.00070   110.........................             0.47628
50.......................................             0.00076   111.........................             0.48468
51.......................................             0.00085   112.........................             0.49268
52.......................................             0.00095   113.........................             0.49666
53.......................................             0.00106   114.........................             0.49795
54.......................................             0.00120   115.........................             0.49928
55.......................................             0.00143   116.........................             0.49960
56.......................................             0.00177   117.........................             0.49978
57.......................................             0.00205   118.........................             0.49995
58.......................................             0.00239   119.........................             0.50000
59.......................................             0.00276   120.........................             1.00000
60.......................................             0.00321   ............................  ..................
----------------------------------------------------------------------------------------------------------------


0
20. Add Sec.  4044.54 to read as follows:


Sec.  4044.54  Interest assumptions.

    (a) General rule. The plan administrator must use the interest 
rates prescribed in this section to value benefits under Sec.  4044.52.
    (b) Interest rate. The interest rate used to discount an expected 
benefit payment is the interest rate from the applicable 4044 yield 
curve determined under paragraph (c) of this section for the maturity 
point that corresponds to the period of time from the valuation date to 
the date the benefit is expected to be paid unless that period of time 
exceeds 30 years. In that case, the interest rate used is the interest 
rate that corresponds to the maturity point at year 30.0. To address 
the timing of benefit payments during a year, reasonable approximations 
may be used to value benefit payments that are expected to be made 
during a plan year.
    (c) 4044 yield curve. A 4044 yield curve consists of interest rates 
(as percentages) that correspond to mid-year and whole-year maturity 
points for 30.0 years. The applicable 4044 yield curve is the 
applicable blended market yield curve determined under paragraphs 
(d)(1) and (2) of this section adjusted in accordance with paragraph 
(e)(2) of this section by the applicable spreads determined under 
paragraph (e)(1) of this section.
    (d) Blended market yield curves. A blended market yield curve 
consists of interest rates (as percentages), determined as of the last 
day of a month, that correspond to mid-year and whole-year maturity 
points for 30.0 years.
    (1) Applicable blended market yield curve. The applicable blended 
market yield curve is the blended market yield curve as of the 
valuation date if the valuation date is the last day of a month, 
otherwise it is the blended market yield curve as of the last day of 
the month before the month containing the valuation date.
    (2) Determination of blended market yield curve. The blended market 
yield curve is determined by combining the Department of the Treasury's 
TNC Treasury Yield Curve Spot Rates, End of Month yield curve (TNC 
Yield Curve) with the Department of the Treasury's HQM Corporate Bond 
Yield Curve Spot Rates, End of Month yield curve (HQM Bond Yield Curve) 
in accordance with this paragraph (d)(2). To determine the blended 
market yield curve as of the last day of a month--
    (i) Obtain the rate for each maturity point from 0.5 to 30.0 from 
the TNC Yield Curve for the end of the month published by the 
Department of the Treasury.
    (ii) Obtain the rate for each maturity point from 0.5 to 30.0 from 
the HQM Bond Yield Curve for the end of the month published by the 
Department of the Treasury.
    (iii) Determine the interest rate for each maturity point from 0.5 
to 30.0 on the blended market yield curve by multiplying the rate 
determined in paragraph (d)(2)(i) of this section by one-third, 
multiplying the rate determined in paragraph (d)(2)(ii) of this section 
at the year by two-thirds, and adding the products.
    (e) Spreads--(1) Applicable spreads. The applicable spreads for a 
blended market yield curve are the spreads set forth in table 1 to this 
paragraph (e) for the calendar quarter containing the date of the 
blended market yield curve.
    (2) Using spreads to adjust a blended market yield curve. The 4044 
yield curve described in paragraph (c) of this section is determined by 
adjusting the blended market yield curve. This adjustment is made by 
adding the interest rate for each maturity point on the blended market 
yield curve to the spread corresponding to that maturity point from the 
applicable spreads.
    (3) Examples. The following examples illustrate how to determine 
the applicable blended market yield curve and applicable spreads for a 
given valuation date:
    (i) Example 1--August 31, 2024, valuation date. Because the 
valuation date is the last day of a month, the applicable blended 
market yield curve determined under paragraph (d)(1) of

[[Page 48306]]

this section is the blended market yield curve as of that date. Because 
August 31, 2024, is in the third calendar quarter of 2024, the 
applicable spreads determined under paragraph (e)(1) of this section 
are the spreads for the third calendar quarter of 2024.
    (ii) Example 2--November 15, 2024, valuation date. Because the 
valuation date is not the last day of a month, the applicable blended 
market yield curve determined under paragraph (d)(1) of this section is 
the blended market yield curve as of the last day of the month before 
the month containing the valuation date, October 31, 2024. Because 
October 31, 2024, is in the fourth calendar quarter of 2024, the 
applicable spreads determined under paragraph (e)(1) of this section 
are the spreads for the fourth calendar quarter of 2024.

                                        Table 1 to Paragraph (e)--Spreads
----------------------------------------------------------------------------------------------------------------
                                           Third quarter 2024 spreads
-----------------------------------------------------------------------------------------------------------------
                                   Spread                            Spread                           Spread
       Maturity point            (percent)      Maturity point     (percent)      Maturity point     (percent)
----------------------------------------------------------------------------------------------------------------
0.5.........................             TBD   10.5...........             TBD   20.5...........             TBD
1.0.........................             TBD   11.0...........             TBD   21.0...........             TBD
1.5.........................             TBD   11.5...........             TBD   21.5...........             TBD
2.0.........................             TBD   12.0...........             TBD   22.0...........             TBD
2.5.........................             TBD   12.5...........             TBD   22.5...........             TBD
3.0.........................             TBD   13.0...........             TBD   23.0...........             TBD
3.5.........................             TBD   13.5...........             TBD   23.5...........             TBD
4.0.........................             TBD   14.0...........             TBD   24.0...........             TBD
4.5.........................             TBD   14.5...........             TBD   24.5...........             TBD
5.0.........................             TBD   15.0...........             TBD   25.0...........             TBD
5.5.........................             TBD   15.5...........             TBD   25.5...........             TBD
6.0.........................             TBD   16.0...........             TBD   26.0...........             TBD
6.5.........................             TBD   16.5...........             TBD   26.5...........             TBD
7.0.........................             TBD   17.0...........             TBD   27.0...........             TBD
7.5.........................             TBD   17.5...........             TBD   27.5...........             TBD
8.0.........................             TBD   18.0...........             TBD   28.0...........             TBD
8.5.........................             TBD   18.5...........             TBD   28.5...........             TBD
9.0.........................             TBD   19.0...........             TBD   29.0...........             TBD
9.5.........................             TBD   19.5...........             TBD   29.5...........             TBD
10.0........................             TBD   20.0...........             TBD   30.0...........             TBD
----------------------------------------------------------------------------------------------------------------


0
21. Amend Sec.  4044.55 by revising paragraph (c)(1) to read as 
follows:


Sec.  4044.55  XRA when a participant must retire to receive a benefit.

* * * * *
    (c) * * *
    (1) The plan administrator shall determine whether a participant is 
in the high, medium, or low retirement rate category using the 
applicable Selection of Retirement Rate Category Table in Sec.  
4044.58, based on the participant's benefit determined under paragraph 
(b)(1) of this section and the year in which the participant reaches 
URA.
* * * * *

0
22. Amend Sec.  4044.56 by revising paragraph (c) to read as follows:


Sec.  4044.56  XRA when a participant need not retire to receive a 
benefit.

* * * * *
    (c) Procedure. Participants in this case are always assigned to the 
high retirement rate category and therefore the plan administrator 
shall use table II-C (Expected Retirement Ages for Individuals in the 
High Category) in Sec.  4044.58 to determine the XRA. The plan 
administrator shall determine the XRA from table II-C by using the 
participant's URA and earliest retirement age at termination date.

0
23. Add Sec.  4044.58 before the center heading ``Non-Trusteed Plans'' 
to read as follows:


Sec.  4044.58  Tables used to determine expected retirement age

    The following tables are used for determining expected retirement 
age under Sec. Sec.  4044.55 through 4044.57.

Table 1 to Sec.  4044.58

                                Table I-24--Selection of Retirement Rate Category
                                        [For valuation dates in 2024 \1\]
----------------------------------------------------------------------------------------------------------------
                                                    Participant's retirement rate category is--
                                 -------------------------------------------------------------------------------
  If participant reaches URA in                        Medium \3\ if monthly benefit at URA       High \4\ if
             year--               Low \2\ if monthly                   is--                   monthly benefit at
                                   benefit at URA is ----------------------------------------   URA is greater
                                      less than--           From--               To--               than--
----------------------------------------------------------------------------------------------------------------
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

[[Page 48307]]

 
2034 or later...................                 984                 984               4,157               4,157
----------------------------------------------------------------------------------------------------------------
\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.

Table 2 to Sec.  4044.58

                                        Table II-A--Expected Retirement Ages for Individuals in the Low Category
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                 Unreduced retirement age
     Participant's earliest retirement age at valuation date     ---------------------------------------------------------------------------------------
                                                                    60      61      62      63      64      65      66      67      68      69      70
--------------------------------------------------------------------------------------------------------------------------------------------------------
42..............................................................      53      53      53      54      54      54      54      54      54      54      54
43..............................................................      53      54      54      54      55      55      55      55      55      55      55
44..............................................................      54      54      55      55      55      55      55      56      56      56      56
45..............................................................      54      55      55      56      56      56      56      56      56      56      56
46..............................................................      55      55      56      56      56      57      57      57      57      57      57
47..............................................................      56      56      56      57      57      57      57      57      57      57      57
48..............................................................      56      57      57      57      58      58      58      58      58      58      58
49..............................................................      56      57      58      58      58      58      59      59      59      59      59
50..............................................................      57      57      58      58      59      59      59      59      59      59      59
51..............................................................      57      58      58      59      59      60      60      60      60      60      60
52..............................................................      58      58      59      59      60      60      60      60      60      60      60
53..............................................................      58      59      59      60      60      61      61      61      61      61      61
54..............................................................      58      59      60      60      61      61      61      61      61      61      61
55..............................................................      59      59      60      61      61      61      62      62      62      62      62
56..............................................................      59      60      60      61      61      62      62      62      62      62      62
57..............................................................      59      60      61      61      62      62      62      62      62      62      62
58..............................................................      59      60      61      61      62      62      63      63      63      63      63
59..............................................................      59      60      61      62      62      63      63      63      63      63      63
60..............................................................      60      60      61      62      62      63      63      63      63      63      63
61..............................................................  ......      61      61      62      63      63      63      63      64      64      64
62..............................................................  ......  ......      62      62      63      63      63      64      64      64      64
63..............................................................  ......  ......  ......      63      63      64      64      65      65      65      65
64..............................................................  ......  ......  ......  ......      64      64      65      65      65      65      65
65..............................................................  ......  ......  ......  ......  ......      65      65      65      65      65      65
66..............................................................  ......  ......  ......  ......  ......  ......      66      66      66      66      66
67..............................................................  ......  ......  ......  ......  ......  ......  ......      67      67      67      67
68..............................................................  ......  ......  ......  ......  ......  ......  ......  ......      68      68      68
69..............................................................  ......  ......  ......  ......  ......  ......  ......  ......  ......      69      69
70..............................................................  ......  ......  ......  ......  ......  ......  ......  ......  ......  ......      70
--------------------------------------------------------------------------------------------------------------------------------------------------------

Table 3 to Sec.  4044.58

                                       Table II-B--Expected Retirement Ages for Individuals in the Medium Category
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                 Unreduced retirement age
     Participant's earliest retirement age at valuation date     ---------------------------------------------------------------------------------------
                                                                    60      61      62      63      64      65      66      67      68      69      70
--------------------------------------------------------------------------------------------------------------------------------------------------------
42..............................................................      49      49      49      49      49      49      49      49      49      49      49
43..............................................................      50      50      50      50      50      50      50      50      50      50      50
44..............................................................      50      51      51      51      51      51      51      51      51      51      51
45..............................................................      51      51      52      52      52      52      52      52      52      52      52
46..............................................................      52      52      52      53      53      53      53      53      53      53      53
47..............................................................      53      53      53      53      53      54      54      54      54      54      54
48..............................................................      54      54      54      54      54      54      54      54      54      54      54
49..............................................................      54      55      55      55      55      55      55      55      55      55      55
50..............................................................      55      55      56      56      56      56      56      56      56      56      56
51..............................................................      56      56      56      57      57      57      57      57      57      57      57
52..............................................................      56      57      57      57      57      58      58      58      58      58      58
53..............................................................      57      57      58      58      58      58      58      58      58      58      58

[[Page 48308]]

 
54..............................................................      57      58      58      59      59      59      59      59      59      59      59
55..............................................................      58      58      59      59      59      60      60      60      60      60      60
56..............................................................      58      59      59      60      60      60      60      60      60      60      60
57..............................................................      59      59      60      60      61      61      61      61      61      61      61
58..............................................................      59      60      60      61      61      61      61      61      61      61      61
59..............................................................      59      60      61      61      62      62      62      62      62      62      62
60..............................................................      60      60      61      62      62      62      62      62      62      62      62
61..............................................................  ......      61      61      62      62      63      63      63      63      63      63
62..............................................................  ......  ......      62      62      62      63      63      63      63      63      63
63..............................................................  ......  ......  ......      63      63      64      64      64      64      64      64
64..............................................................  ......  ......  ......  ......      64      64      64      64      64      64      64
65..............................................................  ......  ......  ......  ......  ......      65      65      65      65      65      65
66..............................................................  ......  ......  ......  ......  ......  ......      66      66      66      66      66
67..............................................................  ......  ......  ......  ......  ......  ......  ......      67      67      67      67
68..............................................................  ......  ......  ......  ......  ......  ......  ......  ......      68      68      68
69..............................................................  ......  ......  ......  ......  ......  ......  ......  ......  ......      69      69
70..............................................................  ......  ......  ......  ......  ......  ......  ......  ......  ......  ......      70
--------------------------------------------------------------------------------------------------------------------------------------------------------

Table 4 to Sec.  4044.58

                                        Table II-C--Expected Retirement Ages for Individuals in the High Category
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                 Unreduced retirement age
     Participant's earliest retirement age at valuation date     ---------------------------------------------------------------------------------------
                                                                    60      61      62      63      64      65      66      67      68      69      70
--------------------------------------------------------------------------------------------------------------------------------------------------------
42..............................................................      46      46      46      46      46      47      47      47      47      47      47
43..............................................................      47      47      47      47      47      47      47      47      47      47      47
44..............................................................      48      48      48      48      48      48      48      48      48      48      48
45..............................................................      49      49      49      49      49      49      49      49      49      49      49
46..............................................................      50      50      50      50      50      50      50      50      50      50      50
47..............................................................      51      51      51      51      51      51      51      51      51      51      51
48..............................................................      52      52      52      52      52      52      52      52      52      52      52
49..............................................................      53      53      53      53      53      53      53      53      53      53      53
50..............................................................      54      54      54      54      54      54      54      54      54      54      54
51..............................................................      54      55      55      55      55      55      55      55      55      55      55
52..............................................................      55      55      56      56      56      56      56      56      56      56      56
53..............................................................      56      56      56      57      57      57      57      57      57      57      57
54..............................................................      57      57      57      57      57      58      58      58      58      58      58
55..............................................................      57      58      58      58      58      58      58      58      58      58      58
56..............................................................      58      58      59      59      59      59      59      59      59      59      59
57..............................................................      58      59      59      60      60      60      60      60      60      60      60
58..............................................................      59      59      60      60      60      60      61      61      61      61      61
59..............................................................      59      60      60      61      61      61      61      61      61      61      61
60..............................................................      60      60      61      61      61      62      62      62      62      62      62
61..............................................................  ......      61      61      62      62      62      62      62      62      62      62
62..............................................................  ......  ......      62      62      62      62      62      62      62      62      62
63..............................................................  ......  ......  ......      63      63      63      64      64      64      64      64
64..............................................................  ......  ......  ......  ......      64      64      64      64      64      64      64
65..............................................................  ......  ......  ......  ......  ......      65      65      65      65      65      65
66..............................................................  ......  ......  ......  ......  ......  ......      66      66      66      66      66
67..............................................................  ......  ......  ......  ......  ......  ......  ......      67      67      67      67
68..............................................................  ......  ......  ......  ......  ......  ......  ......  ......      68      68      68
69..............................................................  ......  ......  ......  ......  ......  ......  ......  ......  ......      69      69
70..............................................................  ......  ......  ......  ......  ......  ......  ......  ......  ......  ......      70
--------------------------------------------------------------------------------------------------------------------------------------------------------

Appendix A to Part 4044--[Removed and Reserved]

0
24. Remove and reserve appendix A to part 4044.

Appendix C to Part 4044--[Removed]

0
25. Remove appendix C to part 4044.

Appendix D to Part 4044--[Removed]

0
26. Remove appendix D to part 4044.

PART 4050--MISSING PARTICIPANTS

0
27. The authority citation for part 4050 continues to read as follows:

    Authority: 29 U.S.C. 1302(b)(3), 1350.


0
28. Amend Sec.  4050.102 by revising the introductory text and 
paragraphs (2), (4), (7) introductory text, and (7)(i) to the 
definition of PBGC missing participants assumptions to read as follows:


Sec.  4050.102  Definitions.

* * * * *
    PBGC missing participants assumptions means the actuarial

[[Page 48309]]

assumptions prescribed in Sec. Sec.  4044.51 through 4044.58 of this 
chapter with the following modifications:
* * * * *
    (2) The mortality assumption is the mortality table in Sec.  
4044.53(h) of this chapter.
* * * * *
    (4) The interest assumption is the assumption for valuing benefits 
under Sec.  4044.54 of this chapter applicable to valuations occurring 
on December 31 of the calendar year preceding the calendar year in 
which the benefit determination date occurs. However, for benefit 
determination dates July 31 through December 31 of 2024, the interest 
assumption is the assumption for valuing benefits under Sec.  4044.54 
of this chapter applicable to valuations occurring on July 31, 2024.
* * * * *
    (7) Notwithstanding the expected retirement age (XRA) assumptions 
in Sec. Sec.  4044.55 through 4044.58 of this chapter--
    (i) In the case of a participant who is not in pay status and whose 
normal retirement date is on or after the benefit determination date, 
benefits are assumed to commence at the XRA, determined using the high 
retirement rate category under table II-C (Expected Retirement Ages for 
Individuals in the High Category) in Sec.  4044.58 of this chapter;
* * * * *

0
29. Amend Sec.  4050.302 by revising the introductory text and 
paragraphs (2), (4), (7) introductory text, and (7)(i) of the 
definition of PBGC missing participants assumptions to read as follows:


Sec.  4050.302  Definitions.

* * * * *
    PBGC missing participants assumptions means the actuarial 
assumptions prescribed in Sec. Sec.  4044.51 through 4044.58 of this 
chapter with the following modifications:
* * * * *
    (2) The mortality assumption is the mortality table in Sec.  
4044.53(h) of this chapter.
* * * * *
    (4) The interest assumption is the assumption for valuing benefits 
under Sec.  4044.54 of this chapter applicable to valuations occurring 
on December 31 of the calendar year preceding the calendar year in 
which the benefit determination date occurs. However, for benefit 
determination dates July 31 through December 31 of 2024, the interest 
assumption is the assumption for valuing benefits under Sec.  4044.54 
of this chapter applicable to valuations occurring on July 31, 2024.
* * * * *
    (7) Notwithstanding the expected retirement age (XRA) assumptions 
in Sec. Sec.  4044.55 through 4044.58 of this chapter--
    (i) In the case of a participant who is not in pay status and whose 
normal retirement date is on or after the benefit determination date, 
benefits are assumed to commence at the XRA, determined using the high 
retirement rate category under table II-C (Expected Retirement Ages for 
Individuals in the High Category) in Sec.  4044.58 of this chapter;
* * * * *

0
30. Amend Sec.  4050.402 by revising the introductory text and 
paragraphs (2), (4), (7) introductory text, and (7)(i) of the 
definition of PBGC missing participants assumptions to read as follows:


Sec.  4050.402  Definitions.

* * * * *
    PBGC missing participants assumptions means the actuarial 
assumptions prescribed in Sec. Sec.  4044.51 through 4044.58 of this 
chapter with the following modifications:
* * * * *
    (2) The mortality assumption is the mortality table in Sec.  
4044.53(h) of this chapter.
* * * * *
    (4) The interest assumption is the assumption for valuing benefits 
under Sec.  4044.54 of this chapter applicable to valuations occurring 
on December 31 of the calendar year preceding the calendar year in 
which the benefit determination date occurs. However, for benefit 
determination dates July 31 through December 31 of 2024, the interest 
assumption is the assumption for valuing benefits under Sec.  4044.54 
of this chapter applicable to valuations occurring on July 31, 2024.
* * * * *
    (7) Notwithstanding the expected retirement age (XRA) assumptions 
in Sec. Sec.  4044.55 through 4044.58 of this chapter--
    (i) In the case of a participant who is not in pay status and whose 
normal retirement date is on or after the benefit determination date, 
benefits are assumed to commence at the XRA, determined using the high 
retirement rate category under table II-C (Expected Retirement Ages for 
Individuals in the High Category) in Sec.  4044.58 of this chapter;
* * * * *

PART 4262--SPECIAL FINANCIAL ASSISTANCE BY PBGC

0
31. The authority citation for part 4262 continues to read as follows:

    Authority: 29 U.S.C. 1302(b)(3), 1432.


Sec.  4262.16  [Amended]

0
32. Amend Sec.  4262.16 in paragraphs (f)(3)(iv), (g)(1) introductory 
text, and (h)(1)(ii) by removing the words ``in appendix B to part 
4044'' and adding in its place the words ``under Sec.  4044.54''.

PART 4281--DUTIES OF PLAN SPONSOR FOLLOWING MASS WITHDRAWAL

0
33. The authority citation for part 4281 continues to read as follows:

    Authority:  29 U.S.C. 1302(b)(3), 1341(a), 1399(c)(1)(D), 1431, 
and 1441.


0
34. Amend Sec.  4281.13 by revising paragraphs (a) and (e) to read as 
follows:


Sec.  4281.13  Benefit valuation methods--in general.

* * * * *
    (a) Using the interest assumptions under Sec.  4044.54 of this 
chapter;
* * * * *
    (e) Adjusting the values to reflect the loading for expenses in 
accordance with Sec.  4044.52(d) of this chapter (substituting the term 
``benefits'' for the term ``benefit liabilities (as defined in 29 
U.S.C. 1301(a)(16))'').

    Signed in Washington, DC.
Ann Y. Orr,
Acting Director, Pension Benefit Guaranty Corporation.
[FR Doc. 2024-11819 Filed 6-5-24; 8:45 am]
BILLING CODE 7709-02-P