The Pension Benefit Guarantee Corporation’s (PBGC) released final regulations that provide a new table for determining expected retirement ages for participants who are undergoing distress or involuntary termination in single-employer pension plans. The updated table is used to compute the value of early retirement benefits, which are included in the total value of benefits under a plan.
PBGC was created by ERISA to, in part, ensure timely and uninterrupted payments of pension benefits. The final rule replaces an existing table with the new table, and applies for valuations beginning in 2019.
Specifically, the final rules amend Appendix D, Table I-19 of ERISA Section 4044, which sets forth the methods for valuing retirement benefits of terminating single-employer plans covered under ERISA. Guaranteed benefits and benefit liabilities under a plan that is terminating due to distress, or is underfunded and involuntarily terminating, must be valued in accordance with this table.
The PBGC has decided against allowing a public comment period, due to the fact that the final rule takes effect as of January 1, 2019.