80 FR 74986 - Allocation of Assets in Single-Employer Plans; Valuation of Benefits and Assets; Expected Retirement Age
PENSION BENEFIT GUARANTY CORPORATION Federal Register Volume 80, Issue 230 (December 1, 2015)
Federal Register Volume 80, Issue 230 (December 1, 2015)
| Page Range | 74986-74987 | |
| FR Document | 2015-30221 |
[Federal Register Volume 80, Number 230 (Tuesday, December 1, 2015)] [Rules and Regulations] [Pages 74986-74987] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2015-30221] ======================================================================= ----------------------------------------------------------------------- PENSION BENEFIT GUARANTY CORPORATION 29 CFR Part 4044 Allocation of Assets in Single-Employer Plans; Valuation of Benefits and Assets; Expected Retirement Age AGENCY: Pension Benefit Guaranty Corporation. ACTION: Final rule. ----------------------------------------------------------------------- SUMMARY: This rule amends the Pension Benefit Guaranty Corporation's regulation on Allocation of Assets in Single-Employer Plans by substituting a new table for determining expected retirement ages for participants in pension plans undergoing distress or involuntary termination with valuation dates falling in 2016. This table is needed in order to compute the value of early retirement benefits and, thus, the total value of benefits under a plan. DATES: Effective January 1, 2016. FOR FURTHER INFORMATION CONTACT: Catherine B. Klion (Klion.Catherine@pbgc.gov), Assistant General Counsel for Regulatory Affairs, Pension Benefit Guaranty Corporation, 1200 K Street NW., Washington, DC 20005, 202-326-4024. (TTY/TDD users may call the Federal relay service toll-free at 1-800-877-8339 and ask to be connected to 202-326-4024.) SUPPLEMENTARY INFORMATION: The Pension Benefit Guaranty Corporation (PBGC) administers the pension plan termination insurance program under Title IV of the Employee Retirement Income Security Act of 1974 (ERISA). PBGC's regulation on Allocation of Assets in Single-Employer Plans (29 CFR part 4044) sets forth (in subpart B) the methods for valuing plan benefits of terminating single-employer plans covered under Title IV. Guaranteed benefits and benefit liabilities under a plan that is undergoing a distress termination must be valued in accordance with subpart B of part 4044. In addition, when PBGC terminates an underfunded plan involuntarily pursuant to ERISA section 4042(a), it uses the subpart B valuation rules to determine the amount of the plan's underfunding. Under Sec. 4044.51(b) of the asset allocation regulation, early retirement benefits are valued based on the annuity starting date, if a retirement date has been selected, or the expected retirement age, if the annuity starting date is not known on the valuation date. Sections 4044.55 through 4044.57 set forth rules for determining the expected retirement ages for plan participants entitled to early retirement benefits. Appendix D of part 4044 contains tables to be used in determining the expected early retirement ages. Table I in appendix D (Selection of Retirement Rate Category) is used to determine whether a participant has a low, medium, or high probability of retiring early. The determination is based on the year a participant would reach ``unreduced retirement age'' (i.e., the earlier of the normal retirement age or the age at which an unreduced benefit is first payable) and the participant's monthly benefit at unreduced retirement age. The table applies only to plans with valuation dates in the current year and is updated annually by the PBGC to reflect changes in the cost of living, etc. Tables II-A, II-B, and II-C (Expected Retirement Ages for Individuals in the Low, Medium, and High Categories respectively) are used to determine the expected retirement age after the probability of early retirement has been determined using Table I. These tables establish, by probability category, the expected retirement age based on both the earliest age a participant could retire under the plan and the unreduced retirement age. This expected retirement age is used to compute the value of the early retirement benefit and, thus, the total value of benefits under the plan. This document amends appendix D to replace Table I-15 with Table I- 16 in order to provide an updated correlation, appropriate for calendar year 2016, between the amount of a participant's benefit and the probability that the participant will elect early retirement. Table I- 16 will be used to value benefits in plans with valuation dates during calendar year 2016. PBGC has determined that notice of, and public comment on, this rule are impracticable and contrary to the public interest. Plan administrators need to be able to estimate accurately the value of plan benefits as early as possible before initiating the termination process. For that purpose, if a plan has a valuation date in 2016, the plan administrator needs the updated table being promulgated in this rule. Accordingly, the public interest is best served by issuing this table expeditiously, without an opportunity for notice and comment, to allow as much time as possible to estimate the value of plan benefits with the proper table for plans with valuation dates in early 2016. PBGC has determined that this action is not a ``significant regulatory action'' under the criteria set forth in Executive Order 12866. Because no general notice of proposed rulemaking is required for this regulation, the Regulatory Flexibility [[Page 74987]] Act of 1980 does not apply (5 U.S.C. 601(2)). List of Subjects in 29 CFR Part 4044 Pension insurance, Pensions. In consideration of the foregoing, 29 CFR part 4044 is amended as follows: PART 4044--ALLOCATION OF ASSETS IN SINGLE-EMPLOYER PLANS 0 1. The authority citation for part 4044 continues to read as follows: Authority: 29 U.S.C. 1301(a), 1302(b)(3), 1341, 1344, 1362. 0 2. Appendix D to part 4044 is amended by removing Table I-15 and adding in its place Table I-16 to read as follows: Appendix D to Part 4044--Tables Used To Determine Expected Retirement Age Table I-16--Selection of Retirement Rate Category [For plans with valuation dates after December 31, 2015, and before January 1, 2017] ---------------------------------------------------------------------------------------------------------------- Participant's Retirement Rate Category is-- --------------------------------------------------------------------------- Low \1\ if Medium \2\ if monthly benefit at URA High \3\ if If participant reaches URA in year-- monthly benefit is-- monthly benefit at URA is less -------------------------------------- at URA is greater than-- From-- To-- than-- ---------------------------------------------------------------------------------------------------------------- 2017................................ 627 627 2,647 2,647 2018................................ 640 640 2,705 2,705 2019................................ 655 655 2,767 2,767 2020................................ 670 670 2,831 2,831 2021................................ 686 686 2,896 2,896 2022................................ 701 701 2,962 2,962 2023................................ 718 718 3,030 3,030 2024................................ 734 734 3,100 3,100 2025................................ 751 751 3,171 3,171 2026 or later....................... 768 768 3,244 3,244 ---------------------------------------------------------------------------------------------------------------- \1\ Table II-A. \2\ Table II-B. \3\ Table II-C. * * * * * Issued in Washington, DC, this day of November 17, 2015. Judith Starr, General Counsel, Pension Benefit Guaranty Corporation. [FR Doc. 2015-30221 Filed 11-30-15; 8:45 am] BILLING CODE 7709-02-P
![74986 Federal Register / Vol. 80, No. 230 / Tuesday, December 1, 2015 / Rules and Regulations
This document postpones the PENSION BENEFIT GUARANTY Appendix D of part 4044 contains tables
effectiveness of the discharge CORPORATION to be used in determining the expected
requirements in both sanctuaries with early retirement ages.
regard to USCG activities for another 6 29 CFR Part 4044 Table I in appendix D (Selection of
months, until June 9, 2016. In the course Retirement Rate Category) is used to
Allocation of Assets in Single- determine whether a participant has a
of the rule making to expand GFNMS Employer Plans; Valuation of Benefits
and CBNMS, NOAA learned from USCG low, medium, or high probability of
and Assets; Expected Retirement Age retiring early. The determination is
that the discharge regulations had the
AGENCY: Pension Benefit Guaranty based on the year a participant would
potential to impair the operations of
Corporation. reach ‘‘unreduced retirement age’’ (i.e.,
USCG vessels and air craft conducting
the earlier of the normal retirement age
law enforcement and on-water training ACTION: Final rule.
or the age at which an unreduced
exercises in GFNMS and CBNMS. The benefit is first payable) and the
SUMMARY: This rule amends the Pension
USCG supports national marine Benefit Guaranty Corporation’s participant’s monthly benefit at
sanctuary management by providing regulation on Allocation of Assets in unreduced retirement age. The table
routine surveillance and dedicated law Single-Employer Plans by substituting a applies only to plans with valuation
enforcement of the National Marine new table for determining expected dates in the current year and is updated
Sanctuaries Act and sanctuary retirement ages for participants in annually by the PBGC to reflect changes
regulations. pension plans undergoing distress or in the cost of living, etc.
To ensure that the March 12, 2015 involuntary termination with valuation Tables II–A, II–B, and II–C (Expected
rule does not undermine USCG’s ability dates falling in 2016. This table is Retirement Ages for Individuals in the
to perform its duties, NOAA postponed needed in order to compute the value of Low, Medium, and High Categories
early retirement benefits and, thus, the respectively) are used to determine the
for 6 months the effectiveness of the
total value of benefits under a plan. expected retirement age after the
discharge requirements for USCG probability of early retirement has been
operations. Specifically, the DATES: Effective January 1, 2016.
determined using Table I. These tables
effectiveness of the discharge FOR FURTHER INFORMATION CONTACT:
establish, by probability category, the
requirements was postponed until Catherine B. Klion (Klion.Catherine@ expected retirement age based on both
December 9, 2015. However, NOAA pbgc.gov), Assistant General Counsel for the earliest age a participant could retire
needs more time to assess USCG Regulatory Affairs, Pension Benefit under the plan and the unreduced
activities and develop alternatives for an Guaranty Corporation, 1200 K Street retirement age. This expected retirement
environmental assessment developed NW., Washington, DC 20005, 202–326– age is used to compute the value of the
pursuant to the requirements of the 4024. (TTY/TDD users may call the early retirement benefit and, thus, the
National Environmental Policy Act. Federal relay service toll-free at 1–800– total value of benefits under the plan.
Therefore, NOAA is postponing the 877–8339 and ask to be connected to This document amends appendix D to
202–326–4024.) replace Table I–15 with Table I–16 in
effectiveness of the discharge
SUPPLEMENTARY INFORMATION: The order to provide an updated correlation,
requirements with respect to USCG
operations for another 6 months, until Pension Benefit Guaranty Corporation appropriate for calendar year 2016,
(PBGC) administers the pension plan between the amount of a participant’s
June 9, 2016. During this time, NOAA
termination insurance program under benefit and the probability that the
will consider how to address USCG’s
Title IV of the Employee Retirement participant will elect early retirement.
concerns and will consider, among
Income Security Act of 1974 (ERISA). Table I–16 will be used to value benefits
other things, whether to exempt certain PBGC’s regulation on Allocation of in plans with valuation dates during
USCG activities in sanctuary Assets in Single-Employer Plans (29 calendar year 2016.
regulations. The public, other federal CFR part 4044) sets forth (in subpart B) PBGC has determined that notice of,
agencies, and interested stakeholders the methods for valuing plan benefits of and public comment on, this rule are
will be given an opportunity to terminating single-employer plans impracticable and contrary to the public
comment on various alternatives that covered under Title IV. Guaranteed interest. Plan administrators need to be
are being considered. This will include benefits and benefit liabilities under a able to estimate accurately the value of
the opportunity to review any proposed plan that is undergoing a distress plan benefits as early as possible before
rule and related environmental analysis. termination must be valued in initiating the termination process. For
Authority: 16 U.S.C. 1431 et seq.; 16 accordance with subpart B of part 4044. that purpose, if a plan has a valuation
U.S.C. 470. In addition, when PBGC terminates an date in 2016, the plan administrator
underfunded plan involuntarily needs the updated table being
Dated: November 20, 2015. pursuant to ERISA section 4042(a), it promulgated in this rule. Accordingly,
John Armor, uses the subpart B valuation rules to the public interest is best served by
Acting Director for the Office of National determine the amount of the plan’s issuing this table expeditiously, without
Marine Sanctuaries. underfunding. an opportunity for notice and comment,
[FR Doc. 2015–30434 Filed 11–30–15; 8:45 am] Under § 4044.51(b) of the asset to allow as much time as possible to
BILLING CODE 3510–NK–P allocation regulation, early retirement estimate the value of plan benefits with
benefits are valued based on the annuity the proper table for plans with valuation
starting date, if a retirement date has dates in early 2016.
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been selected, or the expected PBGC has determined that this action
retirement age, if the annuity starting is not a ‘‘significant regulatory action’’
date is not known on the valuation date. under the criteria set forth in Executive
Sections 4044.55 through 4044.57 set Order 12866.
forth rules for determining the expected Because no general notice of proposed
retirement ages for plan participants rulemaking is required for this
entitled to early retirement benefits. regulation, the Regulatory Flexibility
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![Federal Register / Vol. 80, No. 230 / Tuesday, December 1, 2015 / Rules and Regulations 74987
Act of 1980 does not apply (5 U.S.C. PART 4044—ALLOCATION OF ■ 2. Appendix D to part 4044 is
601(2)). ASSETS IN SINGLE-EMPLOYER amended by removing Table I–15 and
PLANS adding in its place Table I–16 to read as
List of Subjects in 29 CFR Part 4044
follows:
■ 1. The authority citation for part 4044
Pension insurance, Pensions. Appendix D to Part 4044—Tables Used
continues to read as follows:
In consideration of the foregoing, 29 Authority: 29 U.S.C. 1301(a), 1302(b)(3), To Determine Expected Retirement Age
CFR part 4044 is amended as follows: 1341, 1344, 1362.
TABLE I–16—SELECTION OF RETIREMENT RATE CATEGORY
[For plans with valuation dates after December 31, 2015, and before January 1, 2017]
Participant’s Retirement Rate Category is—
If participant reaches URA in year— Low 1 if monthly Medium 2 if monthly benefit at URA is— High 3 if monthly
benefit at URA is benefit at URA is
less than— From— To— greater than—
2017 ......................................................................................... 627 627 2,647 2,647
2018 ......................................................................................... 640 640 2,705 2,705
2019 ......................................................................................... 655 655 2,767 2,767
2020 ......................................................................................... 670 670 2,831 2,831
2021 ......................................................................................... 686 686 2,896 2,896
2022 ......................................................................................... 701 701 2,962 2,962
2023 ......................................................................................... 718 718 3,030 3,030
2024 ......................................................................................... 734 734 3,100 3,100
2025 ......................................................................................... 751 751 3,171 3,171
2026 or later ............................................................................ 768 768 3,244 3,244
1 Table II–A.
2 Table II–B.
3 Table II–C.
* * * * * published as a direct final rule as the FOR FURTHER INFORMATION CONTACT: Ms.
Issued in Washington, DC, this day of Department of Defense does not expect Tracy Rogers, Chief, FOIA/PA,
November 17, 2015. to receive any adverse comments, and telephone: 703–428–6513.
Judith Starr, so a proposed rule is unnecessary. SUPPLEMENTARY INFORMATION: The
General Counsel, Pension Benefit Guaranty DATES: The rule will be effective on revisions to this rule will be reported in
Corporation. February 4, 2016 unless comments are future status updates as part of DoD’s
[FR Doc. 2015–30221 Filed 11–30–15; 8:45 am] received that would result in a contrary retrospective plan under Executive
BILLING CODE 7709–02–P determination. Comments will be Order 13563 completed in August 2011.
accepted on or before February 1, 2016. DoD’s full plan can be accessed at:
http://www.regulations.gov/#!docket
DEPARTMENT OF DEFENSE ADDRESSES: You may submit comments, Detail;D=DOD-2011-OS-0036.
identified by docket number and/or
Regulatory Information Number (RIN) Direct Final Rule and Significant
Department of the Army
and title, by any of the following Adverse Comments
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[USA–2015–HQ–0036] • Federal Rulemaking Portal: http:// meets the criteria for a direct final rule
www.regulations.gov. Follow the because it involves changes dealing
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• Mail: Department of Defense, Office Programs. DoD expects no opposition to
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Document Created: 2018-03-02 09:10:32
Document Modified: 2018-03-02 09:10:32
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Rules and Regulations | |
| Action | Final rule. | |
| Dates | Effective January 1, 2016. | |
| Contact | Catherine B. Klion ([email protected]), Assistant General Counsel for Regulatory Affairs, Pension Benefit Guaranty Corporation, 1200 K Street NW., Washington, DC 20005, 202-326-4024. (TTY/TDD users may call the Federal relay service toll-free at 1-800-877-8339 and ask to be connected to 202-326-4024.) | |
| FR Citation | 80 FR 74986 | |
| CFR Associated | Pension Insurance and Pensions |
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