Benefits Payable in Terminated Single-Employer Plans; Interest Assumptions for Paying Benefits, 2303-2304 [2020-00332]
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2303
Federal Register / Vol. 85, No. 10 / Wednesday, January 15, 2020 / Rules and Regulations
Signed at Washington, DC, this 9th day of
January, 2020.
Eugene Scalia,
Secretary, U.S. Department of Labor.
[FR Doc. 2020–00486 Filed 1–14–20; 8:45 am]
BILLING CODE 4510–HL–P
PENSION BENEFIT GUARANTY
CORPORATION
29 CFR Part 4022
Benefits Payable in Terminated SingleEmployer Plans; Interest Assumptions
for Paying Benefits
Pension Benefit Guaranty
Corporation.
ACTION: Final rule.
AGENCY:
This final rule amends the
Pension Benefit Guaranty Corporation’s
regulation on Benefits Payable in
Terminated Single-Employer Plans to
prescribe certain interest assumptions
under the regulation for plans with
valuation dates in February 2020. These
interest assumptions are used for paying
certain benefits under terminating
single-employer plans covered by the
pension insurance system administered
by PBGC.
DATES: Effective February 1, 2020.
FOR FURTHER INFORMATION CONTACT:
Gregory Katz (katz.gregory@pbgc.gov),
Attorney, Regulatory Affairs Division,
Pension Benefit Guaranty Corporation,
1200 K Street NW, Washington, DC
20005, 202–326–4400 ext. 3829. (TTY
users may call the Federal relay service
toll-free at 1–800–877–8339 and ask to
be connected to 202–326–4400, ext.
3829.)
SUMMARY:
PBGC’s
regulation on Benefits Payable in
SUPPLEMENTARY INFORMATION:
Rate set
For plans with a valuation
date
On or after
*
316
Before
Terminated Single-Employer Plans (29
CFR part 4022) prescribes actuarial
assumptions—including interest
assumptions—for paying plan benefits
under terminated single-employer plans
covered by title IV of the Employee
Retirement Income Security Act of 1974
(ERISA). The interest assumptions in
the regulation are also published on
PBGC’s website (https://www.pbgc.gov).
PBGC uses the interest assumptions in
appendix B to part 4022 (‘‘Lump Sum
Interest Rates for PBGC Payments’’) to
determine whether a benefit is payable
as a lump sum and to determine the
amount to pay. Because some privatesector pension plans use these interest
rates to determine lump sum amounts
payable to plan participants (if the
resulting lump sum is larger than the
amount required under section 417(e)(3)
of the Internal Revenue Code and
section 205(g)(3) of ERISA), these rates
are also provided in appendix C to part
4022 (‘‘Lump Sum Interest Rates for
Private-Sector Payments’’).
This final rule updates appendices B
and C of the benefit payments regulation
to provide the rates for February 2020
measurement dates.
The February 2020 lump sum interest
assumptions will be 0.25 percent for the
period during which a benefit is (or is
assumed to be) in pay status and 4.00
percent during any years preceding the
benefit’s placement in pay status. In
comparison with the interest
assumptions in effect for January 2020,
these assumptions represent no change
in the immediate rate and are otherwise
unchanged.
PBGC updates appendices B and C
each month. PBGC has determined that
notice and public comment on this
amendment are impracticable and
contrary to the public interest. This
*
3–1–20
3. In appendix C to part 4022, rate set
316 is added at the end of the table to
read as follows:
■
0.25
jbell on DSKJLSW7X2PROD with RULES
16:59 Jan 14, 2020
Jkt 250001
Employee benefit plans, Pension
insurance, Pensions, Reporting and
recordkeeping requirements.
In consideration of the foregoing, 29
CFR part 4022 is amended as follows:
PART 4022—BENEFITS PAYABLE IN
TERMINATED SINGLE-EMPLOYER
PLANS
1. 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.
2. In appendix B to part 4022, rate set
316 is added at the end of the table to
read as follows:
■
Appendix B to Part 4022—Lump Sum
Interest Rates for PBGC Payments
*
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Appendix C to Part 4022—Lump Sum
Interest Rates for Private-Sector
Payments
*
VerDate Sep<11>2014
List of Subjects in 29 CFR Part 4022
Deferred annuities
(percent)
Immediate
annuity rate
(percent)
*
2–1–20
finding is based on the need to issue
new interest assumptions promptly so
that they are available for plans that rely
on our publication of them each month
to calculate lump sum benefit amounts.
Because of the need to provide
immediate guidance for the payment of
benefits under plans with valuation
dates during February 2020, PBGC finds
that good cause exists for making the
assumptions set forth in this
amendment effective less than 30 days
after publication.
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
amendment, the Regulatory Flexibility
Act of 1980 does not apply. See 5 U.S.C.
601(2).
E:\FR\FM\15JAR1.SGM
15JAR1
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7
8
2304
Federal Register / Vol. 85, No. 10 / Wednesday, January 15, 2020 / Rules and Regulations
For plans with a valuation
date
Rate set
On or after
*
Before
*
316
*
2–1–20
3–1–20
Issued in Washington, DC.
Stephanie Cibinic,
Deputy Assistant General Counsel for
Regulatory Affairs, Pension Benefit Guaranty
Corporation.
[FR Doc. 2020–00332 Filed 1–14–20; 8:45 am]
BILLING CODE 7709–02–P
PENSION BENEFIT GUARANTY
CORPORATION
29 CFR Parts 4071 and 4302
RIN 1212–AB45
Adjustment of Civil Penalties for
Inflation
Pension Benefit Guaranty
Corporation.
ACTION: Final rule.
AGENCY:
The Pension Benefit Guaranty
Corporation is required to amend its
regulations annually to adjust for
inflation the maximum civil penalty for
failure to provide certain notices or
other material information and for
failure to provide certain multiemployer
plan notices.
DATES:
Effective date: This rule is effective on
January 15, 2020.
Applicability date: The increases in
the civil monetary penalties under
sections 4071 and 4302 of the Employee
Retirement Income Security Act
provided for in this rule apply to such
penalties assessed after January 15,
2020.
FOR FURTHER INFORMATION CONTACT:
jbell on DSKJLSW7X2PROD with RULES
Stephanie Cibinic, Deputy Assistant
General Counsel for Regulatory Affairs
(cibinic.stephanie@pbgc.gov), Office of
the General Counsel, Pension Benefit
Guaranty Corporation, 1200 K Street
NW, Washington, DC 20005–4026; 202–
229–6352. (TTY users may call the
Federal relay service toll-free at 800–
877–8339 and ask to be connected to
202–229–6352.)
SUPPLEMENTARY INFORMATION:
Executive Summary
Purpose of the Regulatory Action
This rule is needed to carry out the
requirements of the Federal Civil
Penalties Inflation Adjustment Act
16:59 Jan 14, 2020
Jkt 250001
0.25
Deferred annuities
(percent)
i1
i2
*
4.00
4.00
i3
*
Improvements Act of 2015 and Office of
Management and Budget guidance M–
20–05. The rule adjusts, as required for
2020, the maximum civil penalties
under 29 CFR part 4071 and 29 CFR part
4302 that the Pension Benefit Guaranty
Corporation (PBGC) may assess for
failure to provide certain notices or
other material information and certain
multiemployer plan notices.
PBGC’s legal authority for this action
comes from the Federal Civil Penalties
Inflation Adjustment Act of 1990 as
amended by the Federal Civil Penalties
Inflation Adjustment Act Improvements
Act of 2015 and from sections
4002(b)(3), 4071, and 4302 of the
Employee Retirement Income Security
Act of 1974 (ERISA).
Major Provisions of the Regulatory
Action
SUMMARY:
VerDate Sep<11>2014
Immediate
annuity rate
(percent)
This rule adjusts as required by law
the maximum civil penalties that PBGC
may assess under sections 4071 and
4302 of ERISA. The new maximum
amounts are $2,233 for section 4071
penalties and $297 for section 4302
penalties.
Background
PBGC administers title IV of ERISA.
Title IV has two provisions that
authorize PBGC to assess civil monetary
penalties.1 Section 4302, added to
ERISA by the Multiemployer Pension
Plan Amendments Act of 1980,
authorizes PBGC to assess a civil
penalty of up to $100 a day for failure
to provide a notice under subtitle E of
title IV of ERISA (dealing with
multiemployer plans). Section 4071,
added to ERISA by the Omnibus Budget
Reconciliation Act of 1987, authorizes
PBGC to assess a civil penalty of up to
$1,000 a day for failure to provide a
notice or other material information
under subtitles A, B, and C of title IV
and sections 303(k)(4) and 306(g)(4) of
title I of ERISA.
1 Under the Federal Civil Penalties Inflation
Adjustment Act of 1990, a penalty is a civil
monetary penalty if (among other things) it is for
a specific monetary amount or has a maximum
amount specified by Federal law. Title IV also
provides (in section 4007) for penalties for late
payment of premiums, but those penalties are
neither in a specified amount nor subject to a
specified maximum amount.
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Adjustment of Civil Penalties
On November 2, 2015, the President
signed into law the Federal Civil
Penalties Inflation Adjustment Act
Improvements Act of 2015,2 which
requires agencies to adjust civil
monetary penalties for inflation and to
publish the adjustments in the Federal
Register. An initial adjustment was
required to be made by interim final
rule published by July 1, 2016, and
effective by August 1, 2016. Subsequent
adjustments must be published by
January 15 each year after 2016.
On December 16, 2019, the Office of
Management and Budget issued
memorandum M–20–05 on
implementation of the 2020 annual
inflation adjustment pursuant to the
2015 act.3 The memorandum provides
agencies with the cost-of-living
adjustment multiplier for 2020, which is
based on the Consumer Price Index
(CPI–U) for the month of October 2019,
not seasonally adjusted. The multiplier
for 2020 is 1.01764. The adjusted
maximum amounts are $2,233 for
section 4071 penalties and $297 for
section 4302 penalties.
Compliance With Regulatory
Requirements
The Office of Management and Budget
has determined that this rule is not a
‘‘significant regulatory action’’ under
Executive Order 12866 and therefore not
subject to its review. As this is not a
significant regulatory action under E.O.
12866, it is not considered an E.O.
13771 regulatory action.
The Office of Management and Budget
also has determined that notice and
public comment on this final rule are
unnecessary because the adjustment of
civil penalties implemented in the rule
is required by law. See 5 U.S.C. 553(b).
Because no general notice of proposed
rulemaking is required for this rule, the
Regulatory Flexibility Act of 1980 does
not apply. See 5 U.S.C. 601(2).
2 Sec. 701, Public Law 114–74, 129 Stat. 599–601
(Bipartisan Budget Act of 2015).
3 See M–20–05, Implementation of Penalty
Inflation Adjustments for 2020, Pursuant to the
Federal Civil Penalties Inflation Adjustment Act
Improvements Act of 2015, https://
www.whitehouse.gov/omb/information-foragencies/memoranda/.
E:\FR\FM\15JAR1.SGM
15JAR1
]]>Agencies
[Federal Register Volume 85, Number 10 (Wednesday, January 15, 2020)]
[Rules and Regulations]
[Pages 2303-2304]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-00332]
=======================================================================
-----------------------------------------------------------------------
PENSION BENEFIT GUARANTY CORPORATION
29 CFR Part 4022
Benefits Payable in Terminated Single-Employer Plans; Interest
Assumptions for Paying Benefits
AGENCY: Pension Benefit Guaranty Corporation.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: This final rule amends the Pension Benefit Guaranty
Corporation's regulation on Benefits Payable in Terminated Single-
Employer Plans to prescribe certain interest assumptions under the
regulation for plans with valuation dates in February 2020. These
interest assumptions are used for paying certain benefits under
terminating single-employer plans covered by the pension insurance
system administered by PBGC.
DATES: Effective February 1, 2020.
FOR FURTHER INFORMATION CONTACT: Gregory Katz ([email protected]),
Attorney, Regulatory Affairs Division, Pension Benefit Guaranty
Corporation, 1200 K Street NW, Washington, DC 20005, 202-326-4400 ext.
3829. (TTY users may call the Federal relay service toll-free at 1-800-
877-8339 and ask to be connected to 202-326-4400, ext. 3829.)
SUPPLEMENTARY INFORMATION: PBGC's regulation on Benefits Payable in
Terminated Single-Employer Plans (29 CFR part 4022) prescribes
actuarial assumptions--including interest assumptions--for paying plan
benefits under terminated single-employer plans covered by title IV of
the Employee Retirement Income Security Act of 1974 (ERISA). The
interest assumptions in the regulation are also published on PBGC's
website (https://www.pbgc.gov).
PBGC uses the interest assumptions in appendix B to part 4022
(``Lump Sum Interest Rates for PBGC Payments'') to determine whether a
benefit is payable as a lump sum and to determine the amount to pay.
Because some private-sector pension plans use these interest rates to
determine lump sum amounts payable to plan participants (if the
resulting lump sum is larger than the amount required under section
417(e)(3) of the Internal Revenue Code and section 205(g)(3) of ERISA),
these rates are also provided in appendix C to part 4022 (``Lump Sum
Interest Rates for Private-Sector Payments'').
This final rule updates appendices B and C of the benefit payments
regulation to provide the rates for February 2020 measurement dates.
The February 2020 lump sum interest assumptions will be 0.25
percent for the period during which a benefit is (or is assumed to be)
in pay status and 4.00 percent during any years preceding the benefit's
placement in pay status. In comparison with the interest assumptions in
effect for January 2020, these assumptions represent no change in the
immediate rate and are otherwise unchanged.
PBGC updates appendices B and C each month. PBGC has determined
that notice and public comment on this amendment are impracticable and
contrary to the public interest. This finding is based on the need to
issue new interest assumptions promptly so that they are available for
plans that rely on our publication of them each month to calculate lump
sum benefit amounts.
Because of the need to provide immediate guidance for the payment
of benefits under plans with valuation dates during February 2020, PBGC
finds that good cause exists for making the assumptions set forth in
this amendment effective less than 30 days after publication.
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 amendment, the Regulatory Flexibility Act of 1980 does not apply.
See 5 U.S.C. 601(2).
List of Subjects in 29 CFR Part 4022
Employee benefit plans, Pension insurance, Pensions, Reporting and
recordkeeping requirements.
In consideration of the foregoing, 29 CFR part 4022 is amended as
follows:
PART 4022--BENEFITS PAYABLE IN TERMINATED SINGLE-EMPLOYER PLANS
0
1. 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
2. In appendix B to part 4022, rate set 316 is added at the end of the
table to read as follows:
Appendix B to Part 4022--Lump Sum Interest Rates for PBGC Payments
* * * * *
--------------------------------------------------------------------------------------------------------------------------------------------------------
For plans with a valuation date Immediate Deferred annuities (percent)
Rate set ---------------------------------- annuity rate ------------------------------------------------------------------------------------
On or after Before (percent) i1 i2 i3 n1 n2
--------------------------------------------------------------------------------------------------------------------------------------------------------
* * * * * * *
316 2-1-20 3-1-20 0.25 4.00 4.00 4.00 7 8
--------------------------------------------------------------------------------------------------------------------------------------------------------
0
3. In appendix C to part 4022, rate set 316 is added at the end of the
table to read as follows:
Appendix C to Part 4022--Lump Sum Interest Rates for Private-Sector
Payments
* * * * *
[[Page 2304]]
--------------------------------------------------------------------------------------------------------------------------------------------------------
For plans with a valuation date Immediate Deferred annuities (percent)
Rate set ---------------------------------- annuity rate ------------------------------------------------------------------------------------
On or after Before (percent) i1 i2 i3 n1 n2
--------------------------------------------------------------------------------------------------------------------------------------------------------
* * * * * * *
316 2-1-20 3-1-20 0.25 4.00 4.00 4.00 7 8
--------------------------------------------------------------------------------------------------------------------------------------------------------
Issued in Washington, DC.
Stephanie Cibinic,
Deputy Assistant General Counsel for Regulatory Affairs, Pension
Benefit Guaranty Corporation.
[FR Doc. 2020-00332 Filed 1-14-20; 8:45 am]
BILLING CODE 7709-02-P
