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[Federal Register Volume 89, Number 245 (Friday, December 20, 2024)]
[Rules and Regulations]
[Pages 104040-104043]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-29105]

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PENSION BENEFIT GUARANTY CORPORATION

29 CFR Part 4044

Allocation of Assets in Single-Employer Plans; Valuation of 
Benefits and Assets; Expected Retirement Age; Missing Participants 
Mortality Assumption

AGENCY: Pension Benefit Guaranty Corporation.

ACTION: Final rule.

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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 2025. This table is needed 
to compute the value of early retirement benefits and, thus, the total 
value of benefits under a plan. This rule also provides the mortality 
assumption for use with PBGC's missing participants program for 
determination dates in 2025.

DATES: This rule is effective January 1, 2025.

FOR FURTHER INFORMATION CONTACT: Hilary Duke ([email protected]), 
Assistant General Counsel for Regulatory Affairs, Office of the General 
Counsel, Pension Benefit Guaranty Corporation, 445 12th Street SW, 
Washington, DC 20024-2101, 202-229-3839. 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: 

Background

    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.

Expected Retirement Age Low, Medium, High Tables

    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 4044.58 set forth rules for determining the expected 
retirement ages for plan participants entitled to early retirement 
benefits. Section 4044.58 contains tables to be used in determining the 
expected early retirement ages.\1\
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    \1\ In June 2024, PBGC issued a final rule at 89 FR 48291 
updating the interest, mortality, and expense assumptions used to 
determine the present value of a single-employer plan's benefits 
when it terminates in a distress or involuntary termination. This 
rule moved the expected retirement ages tables from Appendix D in 
part 4044 to Sec.  4044.58.
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    Table I to Sec.  4044.58 (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'' (URA) (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 the 
unreduced retirement age. The table applies only to plans with 
valuation dates in the current year and is updated annually by PBGC to 
reflect changes in the cost of living.
    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 Sec.  4044.58 to replace Table I-24 with Table 
I-25 to provide an updated correlation, appropriate for calendar year 
2025, between the amount of a participant's benefit and the probability 
that the participant will elect early retirement. Table I-25 will be 
used to value benefits in plans with valuation dates during calendar 
year 2025.

Missing Participants Mortality Assumptions

    PBGC's regulation on Missing Participants (29 CFR part 4050) 
provides that the mortality assumption used to determine certain 
amounts to be transferred on behalf of a missing participant from a 
terminating defined benefit plan to PBGC is the mortality table in 
Sec.  4044.53(h). The table currently provides the mortality assumption 
only for benefit determination dates on July 31 \2\ and later in 2024. 
This rule updates the table to provide the mortality assumption for 
benefit determination dates in 2025.
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    \2\ PBGC's June 2024 final rule does not apply to calculations 
where the valuation date is before July 31, 2024.
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Compliance With Regulatory Requirements

    PBGC has determined that notice of, and public comment on, this 
rule are impracticable, unnecessary, and contrary to the public 
interest. PBGC's update of Sec.  4044.58 and Sec.  4044.53(h) for 
calendar year 2025 are routine. If a plan has a valuation date in 2025, 
the plan administrator needs the updated table in

[[Page 104041]]

Sec.  4044.58 being promulgated in this rule to value benefits. 
Similarly, if a plan is transferring amounts on behalf of missing 
participants under part 4050, the plan administrator needs the updated 
mortality table in Sec.  4044.53(h) for benefit determination dates in 
2025. Accordingly, PBGC finds that the public interest is best served 
by issuing these tables expeditiously, without an opportunity for 
notice and comment, and that good cause exists for making the table set 
forth in this amendment effective less than 30 days after publication 
to allow the use of the proper tables to determine the value benefits 
for dates in early 2025.
    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

    Employee benefit plans, Pension insurance.

    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. Amend Sec.  4044.53 by revising table 4 to paragraph (h) to read as 
follows:

Sec.  4044.53  Mortality assumptions.

* * * * *
    (h) * * *

                      Table 4 to Paragraph (h)--Missing Participants Unisex Mortality Table
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                                                                 Benefit determination    Benefit determination
                              Age                                    dates in 2024            dates in 2025
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0.............................................................                  0.00207                  0.00204
1.............................................................                  0.00015                  0.00014
2.............................................................                  0.00010                  0.00009
3.............................................................                  0.00008                  0.00007
4.............................................................                  0.00006                  0.00006
5.............................................................                  0.00006                  0.00005
6.............................................................                  0.00005                  0.00005
7.............................................................                  0.00005                  0.00005
8.............................................................                  0.00004                  0.00004
9.............................................................                  0.00004                  0.00004
10............................................................                  0.00004                  0.00004
11............................................................                  0.00004                  0.00004
12............................................................                  0.00005                  0.00005
13............................................................                  0.00006                  0.00006
14............................................................                  0.00008                  0.00007
15............................................................                  0.00009                  0.00009
16............................................................                  0.00010                  0.00010
17............................................................                  0.00012                  0.00012
18............................................................                  0.00014                  0.00014
19............................................................                  0.00016                  0.00015
20............................................................                  0.00016                  0.00016
21............................................................                  0.00017                  0.00016
22............................................................                  0.00017                  0.00017
23............................................................                  0.00018                  0.00018
24............................................................                  0.00019                  0.00019
25............................................................                  0.00020                  0.00019
26............................................................                  0.00021                  0.00020
27............................................................                  0.00022                  0.00021
28............................................................                  0.00023                  0.00022
29............................................................                  0.00023                  0.00023
30............................................................                  0.00025                  0.00025
31............................................................                  0.00026                  0.00026
32............................................................                  0.00028                  0.00027
33............................................................                  0.00030                  0.00030
34............................................................                  0.00032                  0.00031
35............................................................                  0.00034                  0.00034
36............................................................                  0.00036                  0.00036
37............................................................                  0.00038                  0.00038
38............................................................                  0.00040                  0.00040
39............................................................                  0.00043                  0.00042
40............................................................                  0.00044                  0.00044
41............................................................                  0.00046                  0.00045
42............................................................                  0.00048                  0.00047
43............................................................                  0.00049                  0.00049
44............................................................                  0.00052                  0.00051
45............................................................                  0.00054                  0.00053
46............................................................                  0.00058                  0.00057
47............................................................                  0.00061                  0.00060
48............................................................                  0.00065                  0.00064
49............................................................                  0.00070                  0.00069
50............................................................                  0.00076                  0.00076
51............................................................                  0.00085                  0.00084

[[Page 104042]]

 
52............................................................                  0.00095                  0.00094
53............................................................                  0.00106                  0.00105
54............................................................                  0.00120                  0.00118
55............................................................                  0.00143                  0.00141
56............................................................                  0.00177                  0.00174
57............................................................                  0.00205                  0.00202
58............................................................                  0.00239                  0.00235
59............................................................                  0.00276                  0.00273
60............................................................                  0.00321                  0.00317
61............................................................                  0.00370                  0.00365
62............................................................                  0.00441                  0.00434
63............................................................                  0.00514                  0.00507
64............................................................                  0.00577                  0.00570
65............................................................                  0.00658                  0.00650
66............................................................                  0.00748                  0.00738
67............................................................                  0.00834                  0.00823
68............................................................                  0.00928                  0.00916
69............................................................                  0.01034                  0.01021
70............................................................                  0.01155                  0.01141
71............................................................                  0.01294                  0.01278
72............................................................                  0.01452                  0.01435
73............................................................                  0.01631                  0.01611
74............................................................                  0.01837                  0.01815
75............................................................                  0.02073                  0.02049
76............................................................                  0.02345                  0.02317
77............................................................                  0.02656                  0.02626
78............................................................                  0.03012                  0.02979
79............................................................                  0.03417                  0.03382
80............................................................                  0.03899                  0.03862
81............................................................                  0.04395                  0.04356
82............................................................                  0.04959                  0.04916
83............................................................                  0.05595                  0.05549
84............................................................                  0.06317                  0.06267
85............................................................                  0.07138                  0.07083
86............................................................                  0.08063                  0.08005
87............................................................                  0.09107                  0.09044
88............................................................                  0.10286                  0.10220
89............................................................                  0.11596                  0.11526
90............................................................                  0.13036                  0.12962
91............................................................                  0.14540                  0.14463
92............................................................                  0.16090                  0.16012
93............................................................                  0.17679                  0.17601
94............................................................                  0.19284                  0.19206
95............................................................                  0.20898                  0.20822
96............................................................                  0.22620                  0.22545
97............................................................                  0.24386                  0.24311
98............................................................                  0.26196                  0.26123
99............................................................                  0.28059                  0.27986
100...........................................................                  0.29960                  0.29887
101...........................................................                  0.31891                  0.31817
102...........................................................                  0.33825                  0.33748
103...........................................................                  0.35757                  0.35673
104...........................................................                  0.37670                  0.37583
105...........................................................                  0.39521                  0.39436
106...........................................................                  0.41327                  0.41245
107...........................................................                  0.43080                  0.42999
108...........................................................                  0.44743                  0.44667
109...........................................................                  0.46339                  0.46271
110...........................................................                  0.47628                  0.47568
111...........................................................                  0.48468                  0.48417
112...........................................................                  0.49268                  0.49226
113...........................................................                  0.49666                  0.49634
114...........................................................                  0.49795                  0.49773
115...........................................................                  0.49928                  0.49915
116...........................................................                  0.49960                  0.49953
117...........................................................                  0.49978                  0.49973
118...........................................................                  0.49995                  0.49993
119...........................................................                  0.50000                  0.50000
120...........................................................                  1.00000                  1.00000
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[[Page 104043]]

0
3. Amend Sec.  4044.58 by revising table 1 to Sec.  4044.58 to read as 
follows:

Sec.  4044.58  Tables used to determine expected retirement age.

* * * * *

                  Table 1 to Sec.   4044.58--Table I-25--Selection of Retirement Rate Category
                                        [For valuation dates in 2025 \1\]
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                                                      Participant's retirement rate category is--
                                     ---------------------------------------------------------------------------
                                          Low \2\ if     Medium \3\ if monthly benefit at URA     High \4\ if
If participant reaches URA in year--   monthly benefit                   is--                   monthly benefit
                                        at URA is less  -------------------------------------- at URA is greater
                                            than--             From--              To--              than--
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2026................................                825                825              3,486              3,486
2027................................                844                844              3,566              3,566
2028................................                864                864              3,648              3,648
2029................................                884                884              3,732              3,732
2030................................                904                904              3,818              3,818
2031................................                925                925              3,906              3,906
2032................................                946                946              3,996              3,996
2033................................                968                968              4,088              4,088
2034................................                990                990              4,182              4,182
2035 or later.......................              1,013              1,013              4,278              4,278
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\1\ Applicable tables for valuation dates before 2025 are available on PBGC's website (www.pbgc.gov).
\2\ Table II-A.
\3\ Table II-B.
\4\ Table II-C.

* * * * *

    Issued in Washington, DC.
Hilary Duke,
Assistant General Counsel for Regulatory Affairs Pension Benefit 
Guaranty Corporation.
[FR Doc. 2024-29105 Filed 12-19-24; 8:45 am]
BILLING CODE 7709-02-P
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