Allocation of Assets in Single-Employer Plans; Valuation of Benefits and Assets; Expected Retirement Age, 69481-69482 [E6-20387]
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Federal Register / Vol. 71, No. 231 / Friday, December 1, 2006 / Rules and Regulations
PBGC to participants in single-employer
plans that have terminated in that year.
Section 230(d) of the Social Security
Act (42 U.S.C. 430(d)) provides special
rules for determining the contribution
and benefit base for purposes of ERISA
section 4022(b)(3)(B). Each year the
Social Security Administration
determines, and notifies the PBGC of,
the contribution and benefit base to be
used by the PBGC under these
provisions, and the PBGC publishes an
amendment to Appendix D to Part 4022
to add the guarantee limit for the
coming year.
The PBGC has been notified by the
Social Security Administration that,
under section 230 of the Social Security
Act, $72,600 is the contribution and
benefit base that is to be used to
calculate the PBGC maximum
guaranteeable benefit for 2007.
Accordingly, the formula under section
4022(b)(3)(B) of ERISA and 29 CFR
4022.22(b) is: $750 multiplied by
$72,600/$13,200. Thus, the maximum
monthly benefit guaranteeable by the
PBGC in 2007 is $4,125.00 per month in
the form of a life annuity beginning at
age 65. This amendment updates
Appendix D to Part 4022 to add this
maximum guaranteeable amount for
plans that terminate in 2007. (If a
benefit is payable in a different form or
begins at a different age, the maximum
guaranteeable amount is the actuarial
equivalent of $4,125.00 per month.)
General notice of proposed
rulemaking is unnecessary. The
maximum guaranteeable benefit is
determined according to the formula in
section 4022(b)(3)(B) of ERISA, and
these amendments make no change in
its method of calculation but simply list
2007 maximum guaranteeable benefit
amounts for the information of the
public.
The PBGC has determined that this
action is not a ‘‘significant regulatory
action’’ under the criteria set forth in
Executive Order 12866.
Because no general notice of proposed
rulemaking is required for this
regulation, the Regulatory Flexibility
Act of 1980 does not apply (5 U.S.C.
601(2)).
rmajette on PROD1PC67 with RULES1
List of Subjects in 29 CFR Part 4022
Pension insurance, Pensions,
Reporting and recordkeeping
requirements.
In consideration of the foregoing, 29
CFR part 4022 is amended as follows:
I
VerDate Aug<31>2005
13:12 Nov 30, 2006
Jkt 211001
69481
FOR FURTHER INFORMATION CONTACT:
Catherine B. Klion, Manager, Regulatory
and Policy Division, Legislative and
Regulatory Department, Pension Benefit
I 1. The authority citation for part 4022
Guaranty Corporation, 1200 K Street,
continues to read as follows:
NW., Washington, DC 20005, 202–326–
Authority: 29 U.S.C. 1302, 1322, 1322b,
4024. (TTY/TDD users may call the
1341(c)(3)(D), and 1344.
Federal relay service toll-free at 1–800–
877–8339 and ask to be connected to
I 2. Appendix D to part 4022 is
202–326–4024.)
amended by adding a new entry to the
SUPPLEMENTARY INFORMATION: The
end of the table to read as follows. The
PBGC’s regulation on Allocation of
introductory text is reproduced for the
Assets in Single-Employer Plans (29
convenience of the reader and remains
CFR part 4044) sets forth (in subpart B)
unchanged.
the methods for valuing plan benefits of
Appendix D to Part 4022—Maximum
terminating single-employer plans
Guaranteeable Monthly Benefit
covered under Title IV of the Employee
The following table lists by year the
Retirement Income Security Act of 1974.
maximum guaranteeable monthly benefit
Under ERISA section 4041(c),
payable in the form of a life annuity
guaranteed benefits and benefit
commencing at age 65 as described by
liabilities under a plan that is
§ 4022.22(b) to a participant in a plan that
undergoing a distress termination must
terminated in that year:
be valued in accordance with part 4044,
subpart B. In addition, when the PBGC
Maximum
guaranteeable terminates an underfunded plan
Year
monthly
involuntarily pursuant to ERISA Section
benefit
4042(a), it uses the subpart B valuation
rules to determine the amount of the
plan’s underfunding.
*
*
*
*
*
Under § 4044.51(b) of the asset
2007 ......................................
$4,125.00 allocation regulation, early retirement
benefits are valued based on the annuity
starting date, if a retirement date has
Issued in Washington, DC, this 17th day of
been selected, or the expected
November, 2006.
retirement age, if the annuity starting
Vincent K. Snowbarger,
date is not known on the valuation date.
Interim Director, Pension Benefit Guaranty
Sections 4044.55 through 4044.57 set
Corporation.
forth rules for determining the expected
[FR Doc. E6–20389 Filed 11–30–06; 8:45 am]
retirement ages for plan participants
BILLING CODE 7709–01–P
entitled to early retirement benefits.
Appendix D of part 4044 contains tables
to be used in determining the expected
PENSION BENEFIT GUARANTY
early retirement ages.
CORPORATION
Table I in appendix D (Selection of
29 CFR Part 4044
Retirement Rate Category) is used to
determine whether a participant has a
Allocation of Assets in Singlelow, medium, or high probability of
Employer Plans; Valuation of Benefits
retiring early. The determination is
and Assets; Expected Retirement Age
based on the year a participant would
reach ‘‘unreduced retirement age’’ (i.e.,
AGENCY: Pension Benefit Guaranty
the earlier of the normal retirement age
Corporation.
or the age at which an unreduced
ACTION: Final rule.
benefit is first payable) and the
SUMMARY: This rule amends the Pension
participant’s monthly benefit at
Benefit Guaranty Corporation’s
unreduced retirement age. The table
regulation on Allocation of Assets in
applies only to plans with valuation
Single-Employer Plans by substituting a dates in the current year and is updated
new table that applies to any plan being annually by the PBGC to reflect changes
terminated either in a distress
in the cost of living, etc.
termination or involuntarily by the
Tables II–A, II–B, and II–C (Expected
PBGC with a valuation date falling in
Retirement Ages for Individuals in the
2007, and is used to determine expected Low, Medium, and High Categories
retirement ages for plan participants.
respectively) are used to determine the
This table is needed in order to compute expected retirement age after the
the value of early retirement benefits
probability of early retirement has been
and, thus, the total value of benefits
determined using Table I. These tables
under the plan.
establish, by probability category, the
DATES: Effective Date: January 1, 2007.
expected retirement age based on both
PART 4022—BENEFITS PAYABLE IN
TERMINATED SINGLE-EMPLOYER
PLANS
PO 00000
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69482
Federal Register / Vol. 71, No. 231 / Friday, December 1, 2006 / Rules and Regulations
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–06 with Table I–07 in
order to provide an updated correlation,
appropriate for calendar year 2007,
between the amount of a participant’s
benefit and the probability that the
participant will elect early retirement.
Table I–07 will be used to value benefits
in plans with valuation dates during
calendar year 2007.
The 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 2007, 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 2007.
The PBGC has determined that this
action is not a ‘‘significant regulatory
action’’ under the criteria set forth in
Executive Order 12866.
Because no general notice of proposed
rulemaking is required for this
regulation, the Regulatory Flexibility
Act of 1980 does not apply (5 U.S.C.
601(2)).
List of Subjects in 29 CFR Part 4044
Pension insurance, Pensions.
In consideration of the foregoing, 29
CFR part 4044 is amended as follows:
I
PART 4044—[AMENDED]
1. The authority citation for part 4044
continues to read as follows:
I
Authority: 29 U.S.C. 1301(a), 1302(b)(3),
1341, 1344, 1362.
2. Appendix D to part 4044 is
amended by removing Table I–06 and
adding in its place Table I–07 to read as
follows:
I
Appendix D to Part 4044—Tables Used
To Determine Expected Retirement Age
TABLE I–07.—SELECTION OF RETIREMENT RATE CATEGORY
[For plans with valuation dates after December 31, 2006, and before January 1, 2008]
Participant’s Retirement Rate Category is—
Low 1 if
monthly
benefit at
URA is less
than—
Participant reaches URA in year—
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
.................................................................................................................................
.................................................................................................................................
.................................................................................................................................
.................................................................................................................................
.................................................................................................................................
.................................................................................................................................
.................................................................................................................................
.................................................................................................................................
.................................................................................................................................
or later ....................................................................................................................
1 Table
2 Table
3 Table
*
*
522
534
547
560
574
588
603
618
634
649
From
522
534
547
560
574
588
603
618
634
649
To
High 3 if
monthly
benefit at
URA is
greater
than—
2,204
2,257
2,311
2,367
2,426
2,486
2,549
2,612
2,678
2,745
2,204
2,257
2,311
2,367
2,426
2,486
2,549
2,612
2,678
2,745
II–A.
II–B.
II–C.
*
*
*
Issued in Washington, DC, this 17th day of
November, 2006.
Vincent K. Snowbarger,
Interim Director, Pension Benefit Guaranty
Corporation.
[FR Doc. E6–20387 Filed 11–30–06; 8:45 am]
BILLING CODE 7709–01–P
DEPARTMENT OF THE TREASURY
31 CFR Part 1
Privacy Act; Implementation
rmajette on PROD1PC67 with RULES1
Medium 2 if monthly benefit
at URA is
Internal Revenue Service,
Treasury.
ACTION: Interim final rule.
AGENCY:
SUMMARY: In accordance with the
requirements of the Privacy Act of 1974,
VerDate Aug<31>2005
13:12 Nov 30, 2006
Jkt 211001
as Amended, the Department of the
Treasury gives notice of an amendment
to this part by revising the titles of two
Privacy Act systems of records and
removing five other Privacy Act systems
of records. The systems of records are
related to the functions of the Internal
Revenue Service (IRS), Office of
Professional Responsibility (OPR).
DATES: Effective Date: January 2, 2007.
Comments must be received no later
than January 2, 2007. You may also
submit comments through the Federal
rulemaking portal at https://
www.regulations.gov (follow the
instructions for submitting comments).
ADDRESSES: Comments should be sent to
the Office of Governmental Liaison and
Disclosure, IRS, 1111 Constitution
Avenue, NW., Washington, DC 20224.
To arrange to see the comments, see FOR
FURTHER INFORMATION CONTACT below.
PO 00000
Frm 00054
Fmt 4700
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Earl
Prater, Senior Counsel, OPR, at (202)
874–5936, or for voice mail, (202) 622–
8018 (not toll free numbers).
SUPPLEMENTARY INFORMATION: The IRS is
proposing to simplify the administration
of OPR’s Privacy Act systems of records
by consolidating the current 11 OPR
systems. A proposed notice to revise
and consolidate the Privacy Act systems
of records maintained by the OPR will
be published separately in the Federal
Register. The proposed notice to alter
OPR’s current 11 systems of records will
consolidate all records into the three
revised systems of records: Treasury/IRS
37.006—Correspondence, Miscellaneous
Records, and Information Management
Records; Treasury/IRS 37.007—
Practitioner Disciplinary Records; and
Treasury/IRS 37.009—Enrolled Agent
Records.
FOR FURTHER INFORMATION CONTACT:
E:\FR\FM\01DER1.SGM
01DER1
]]>Agencies
[Federal Register Volume 71, Number 231 (Friday, December 1, 2006)]
[Rules and Regulations]
[Pages 69481-69482]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-20387]
-----------------------------------------------------------------------
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 that applies to any plan being terminated
either in a distress termination or involuntarily by the PBGC with a
valuation date falling in 2007, and is used to determine expected
retirement ages for plan participants. This table is needed in order to
compute the value of early retirement benefits and, thus, the total
value of benefits under the plan.
DATES: Effective Date: January 1, 2007.
FOR FURTHER INFORMATION CONTACT: Catherine B. Klion, Manager,
Regulatory and Policy Division, Legislative and Regulatory Department,
Pension Benefit Guaranty Corporation, 1200 K Street, NW., Washington,
DC 20005, 202-326-4024. (TTY/TDD users may call the Federal relay
service toll-free at 1-800-877-8339 and ask to be connected to 202-326-
4024.)
SUPPLEMENTARY INFORMATION: The 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 of the Employee Retirement Income
Security Act of 1974. Under ERISA section 4041(c), guaranteed benefits
and benefit liabilities under a plan that is undergoing a distress
termination must be valued in accordance with part 4044, subpart B. In
addition, when the 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
[[Page 69482]]
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-06 with Table I-
07 in order to provide an updated correlation, appropriate for calendar
year 2007, between the amount of a participant's benefit and the
probability that the participant will elect early retirement. Table I-
07 will be used to value benefits in plans with valuation dates during
calendar year 2007.
The 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 2007, 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 2007.
The PBGC has determined that this action is not a ``significant
regulatory action'' under the criteria set forth in Executive Order
12866.
Because no general notice of proposed rulemaking is required for
this regulation, the Regulatory Flexibility Act of 1980 does not apply
(5 U.S.C. 601(2)).
List of Subjects in 29 CFR Part 4044
Pension insurance, Pensions.
0
In consideration of the foregoing, 29 CFR part 4044 is amended as
follows:
PART 4044--[AMENDED]
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-06 and adding
in its place Table I-07 to read as follows:
Appendix D to Part 4044--Tables Used To Determine Expected Retirement
Age
Table I-07.--Selection of Retirement Rate Category
[For plans with valuation dates after December 31, 2006, and before January 1, 2008]
----------------------------------------------------------------------------------------------------------------
Participant's Retirement Rate Category is--
---------------------------------------------------
Medium \2\ if monthly High \3\ if
Low \1\ if benefit at URA is monthly
Participant reaches URA in year-- monthly -------------------------- benefit at
benefit at URA is
URA is less From To greater
than-- than--
----------------------------------------------------------------------------------------------------------------
2008........................................................ 522 522 2,204 2,204
2009........................................................ 534 534 2,257 2,257
2010........................................................ 547 547 2,311 2,311
2011........................................................ 560 560 2,367 2,367
2012........................................................ 574 574 2,426 2,426
2013........................................................ 588 588 2,486 2,486
2014........................................................ 603 603 2,549 2,549
2015........................................................ 618 618 2,612 2,612
2016........................................................ 634 634 2,678 2,678
2017 or later............................................... 649 649 2,745 2,745
----------------------------------------------------------------------------------------------------------------
\1\ Table II-A.
\2\ Table II-B.
\3\ Table II-C.
* * * * *
Issued in Washington, DC, this 17th day of November, 2006.
Vincent K. Snowbarger,
Interim Director, Pension Benefit Guaranty Corporation.
[FR Doc. E6-20387 Filed 11-30-06; 8:45 am]
BILLING CODE 7709-01-P
