Federal Register / Vol. 66, No. 231 / Friday, November 30, 2001 / Rules and Regulations 59693

comments on the paperwork burden is

extended until January 29, 2002.

Issued in Washington, DC, November 19,

2001.

Louis C. Cusimano,

Acting Director, Flight Standards Service.

[FR Doc. 01–29479 Filed 11–29–01; 8:45 am]

BILLING CODE 4910–13–M

PENSION BENEFIT GUARANTY

CORPORATION

29 CFR Parts 4011 and 4022

Disclosure to Participants; Benefits

Payable in Terminated SingleEmployer Plans

AGENCY: Pension Benefit Guaranty

Corporation.

ACTION: Final rule.

SUMMARY: This rule amends Appendix D

to the Pension Benefit Guaranty

Corporation’s regulation on Benefits

Payable in Terminated Single-Employer

Plans by adding the maximum

guaranteeable pension benefit that may

be paid by the PBGC with respect to a

plan participant in a single-employer

pension plan that terminates in 2002.

This rule also amends the PBGC’s

regulation on Disclosure to Participants

by adding information on 2002

maximum guaranteed benefit amounts

to Appendix B. The amendment is

necessary because the maximum

guarantee amount changes each year,

based on changes in the contribution

and benefit base under section 230 of

the Social Security Act. The effect of the

amendment is to advise plan

participants and beneficiaries of the

increased maximum guarantee amount

for 2002.

EFFECTIVE DATE: January 1, 2002.

FOR FURTHER INFORMATION CONTACT:

Harold J. Ashner, Assistant General

Counsel, Office of the General Counsel,

Pension Benefit Guaranty Corporation,

1200 K Street, NW., Washington, DC

20005–4026; 202–326–4024. (For TTY/

TDD users, call the Federal relay service

toll-free at 1–800–877–8339 and ask to

be connected to 202–326–4024.)

SUPPLEMENTARY INFORMATION: Section

4022(b) of the Employee Retirement

Income Security Act of 1974 provides

for certain limitations on benefits

guaranteed by the PBGC in terminating

single-employer pension plans covered

under Title IV of ERISA. One of the

limitations, set forth in section

4022(b)(3)(B), is a dollar ceiling on the

amount of the monthly benefit that may

be paid to a plan participant (in the

form of a life annuity beginning at age

65) by the PBGC. The ceiling is equal to

‘‘$750 multiplied by a fraction, the

numerator of which is the contribution

and benefit base (determined under

section 230 of the Social Security Act)

in effect at the time the plan terminates

and the denominator of which is such

contribution and benefit base in effect in

calendar year 1974 [$13,200].’’ This

formula is also set forth in § 4022.22(b)

of the PBGC’s regulation on Benefits

Payable in Terminated Single-Employer

Plans (29 CFR Part 4022). Appendix D

to Part 4022 lists, for each year

beginning with 1974, the maximum

guaranteeable benefit payable by the

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, $63,000 is the contribution and

benefit base that is to be used to

calculate the PBGC maximum

guaranteeable benefit for 2001.

Accordingly, the formula under section

4022(b)(3)(B) of ERISA and 29 CFR

4022.22(b) is: $750 multiplied by

$63,000/$13,200. Thus, the maximum

monthly benefit guaranteeable by the

PBGC in 2002 is $3,579.55 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 2002. (If a

benefit is payable in a different form or

begins at a different age, the maximum

guaranteeable amount is the actuarial

equivalent of $3,579.55 per month.)

Section 4011 of ERISA requires plan

administrators of certain underfunded

plans to provide notice to plan

participants and beneficiaries of the

plan’s funding status and the limits of

the PBGC’s guarantee. The PBGC’s

regulation on Disclosure to Participants

(29 CFR part 4011) implements the

statutory notice requirement. This rule

amends Appendix B to the regulation on

Disclosure to Participants by adding

information on 2002 maximum

guaranteed benefit amounts. Plan

administrators may, subject to the

requirements of that regulation, include

this information in participant notices.

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

2002 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)).

List of Subjects

29 CFR Part 4011

Employee benefit plans, Pension

insurance, Reporting and recordkeeping

requirements.

29 CFR Part 4022

Pension insurance, Pensions,

Reporting and recordkeeping

requirements.

In consideration of the foregoing, 29

CFR parts 4011 and 4022 are amended

as follows:

PART 4011—DISCLOSURE TO

PARTICIPANTS

1. The authority citation for part 4011

continues to read as follows:

Authority: 29 U.S.C. 1302(b)(3), 1311.

2. Appendix B to part 4011 is

amended by adding a new entry in

numerical order to the table to read as

follows.

59694 Federal Register / Vol. 66, No. 231 / Friday, November 30, 2001 / Rules and Regulations

Appendix B to Part 4011.—Table of Maximum Guaranteed Benefits

If a plan terminates in—

The maximum guaranteed benefit for an individual starting to receive benefits at the age listed below is

the amount (monthly or annual) listed below:

Age 65 Age 62 Age 60 Age 55

Monthly Annual Monthly Annual Monthly Annual Monthly Annual

******

*

2002 .................................................. $3,579.55 $42,954.60 $2,827.84 $33,934.08 $2,326.71 $27,920.52 $1,610.80 $19,329.60

* * * * *

PART 4022—BENEFITS PAYABLE IN

TERMINATED SINGLE-EMPLOYER

PLANS

3. 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.

4. Appendix D to part 4022 is

amended by adding a new entry to the

table to read as follows. The

introductory text is republished for the

convenience of the reader and remains

unchanged.

Appendix D to Part 4022—Maximum

Guaranteeable Monthly Benefit

The following table lists by year the

maximum guaranteeable monthly

benefit payable in the form of a life

annuity commencing at age 65 as

described by § 4022.22(b) to a

participant in a plan that terminated in

that year:

Year

Maximum

guaranteeable

monthly benefit

*****

2002 .................................... 3,579.55

Issued in Washington, DC, this 26th day of

November 2001.

Hazel Broadnax,

Acting Executive Director, Pension Benefit

Guaranty Corporation.

[FR Doc. 01–29763 Filed 11–29–01; 8:45 am]

BILLING CODE 7708–01–P

PENSION BENEFIT GUARANTY

CORPORATION

29 CFR Part 4044

Allocation of Assets in SingleEmployer 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

2002, 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.

EFFECTIVE DATE: January 1, 2002.

FOR FURTHER INFORMATION CONTACT:

Harold J. Ashner, Assistant General

Counsel, Office of the General Counsel,

Pension Benefit Guaranty Corporation,

1200 K Street, NW., Washington, DC

20005–4026; 202–326–4024. (For TTY/

TDD users, 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 § 4044.51(b), 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–01 with Table I–02 in

order to provide an updated correlation,

appropriate for calendar year 2002,

between the amount of a participant’s

benefit and the probability that the

participant will elect early retirement.

Table I–02 will be used to value benefits

in plans with valuation dates during

calendar year 2002.

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 2002, the plan administrator

needs the updated table being

promulgated in this rule. Accordingly,

the public interest is best served by