Source: https://www.federalregister.gov/documents/2005/12/01/05-23517/disclosure-to-participants-benefits-payable-in-terminated-single-employer-plans
Timestamp: 2018-04-26 12:00:30
Document Index: 61435301

Matched Legal Cases: ['§\u20094022', 'art 4022', 'art 4022', 'art 4022', 'art 4011', 'art 4011', 'art 4011', 'art 4022']

A Rule by the Pension Benefit Guaranty Corporation on 12/01/2005
70 FR 72074
72074-72075 (2 pages)
05-23517
https://www.federalregister.gov/d/05-23517 https://www.federalregister.gov/d/05-23517
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 2006. This rule also amends the PBGC's regulation on Disclosure to Participants by adding information on 2006 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 2006.
Catherine B. Klion, Attorney, Legislative and Regulatory Department, Pension Benefit Guaranty Corporation, 1200 K Street, NW., Washington, DC 20005-4026; 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.)
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 Start Printed Page 7207565) 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.
The PBGC has been notified by the Social Security Administration that, under section 230 of the Social Security Act, $69,900 is the contribution and benefit base that is to be used to calculate the PBGC maximum guaranteeable benefit for 2006. Accordingly, the formula under section 4022(b)(3)(B) of ERISA and 29 CFR 4022.22(b) is: $750 multiplied by $69,900/$13,200. Thus, the maximum monthly benefit guaranteeable by the PBGC in 2006 is $3,971.59 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 2006. (If a benefit is payable in a different form or begins at a different age, the maximum guaranteeable amount is the actuarial equivalent of $3,971.59 per month.)
For certain underfunded plans, section 4011 of ERISA requires the plan administrator 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 2006 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 2006 maximum guaranteeable benefit amounts for the information of the public.
2. Appendix B to part 4011 is amended by adding a new entry to the end of the table to read as follows.
Appendix B to Part 4011.—Table of Maximum Guaranteed Benefits
2006 $3,971.59 $47,659.08 $3,137.56 $37,650.72 $2,581.53 $30,978.36 $1,787.22 $21,446.64
4. Appendix D to part 4022 is amended by adding a new entry to the end of the table to read as follows. The introductory text is reproduced for the convenience of the reader and remains unchanged.
2006 3,971.59
Issued in Washington, DC, this 16th day of November, 2005.
[FR Doc. 05-23517 Filed 11-30-05; 8:45 am]