Benefits Forward » PBGC Guidance

PBGC Letter to American Airlines’ Employees

administrator — Thu, 26 Jan 2012 21:13:42 +0000

In response to communications from American Airlines to its employees regarding concerns in the event it should terminate its pension plan, the PBGC has written its own communication and analysis.

Document Excerpt

WASHINGTON—The Pension Benefit Guaranty Corporation today pushed back on misleading statements to American Airlines employees by its management about their pension plans.

Link http://www.pbgc.gov/news/press/releases/pr12-14.html

February Interest Rates On Termination

administrator — Fri, 13 Jan 2012 15:47:52 +0000

The PBGC has revised its rules to reflect the interest rate to be used in paying benefits from a terminated plan in February, 2012.

Document Excerpt

This final rule amends the Pension Benefit Guaranty Corporation’s regulation on Benefits Payable in Terminated Single-Employer Plans to prescribe interest assumptions under the regulation for valuation dates in February 2012. The interest assumptions are used for paying benefits under terminating singleemployer plans covered by the pension insurance system administered by PBGC.

Link http://www.gpo.gov/fdsys/pkg/FR-2012-01-13/pdf/2012-586.pdf

Policy on Premium Changes Based on Recharacterization of Contributions

administrator — Thu, 22 Dec 2011 15:15:44 +0000

The PBGC releases a policy statement on accepting and responding to amended premium filings based on recharacterizations of contributions.

Document Excerpt

This policy statement addresses PBGC’s policy on accepting and responding to amended premium filings based on recharacterization of contributions. Recharacterization of contributions refers to a situation in which contributions originally designated as being for the plan year in which they were made are retroactively redesignated as being for the preceding plan year.

Link http://www.gpo.gov/fdsys/pkg/FR-2011-12-22/pdf/2011-32804.pdf

Interest Rates for January Lump Sums

administrator — Thu, 15 Dec 2011 21:34:20 +0000

The PBGC has released the applicable interest rates for lump sums payable in January, 2012.

Document Excerpt

The immediate interest rate for valuing lump sum payments for the month of January 2012 is 1.25%. The deferred interest rate I₁ is 4.00%, I₂ is 4.00%, and I₃ is 4.00%. (The immediate interest rate for December 2011 was 1.50% for lump sum payments; the deferred interest rate I₁ was 4.00%, I₂ was 4.00%, and I₃ was 4.00%).

Link http://www.pbgc.gov/prac/interest/monthly/miru121511.html

Final Rule: Allocation of Assets; Interest Assumptions

administrator — Thu, 15 Dec 2011 15:18:08 +0000

The PBGC amends its final rule on the interest rate used for valuing and paying benefits under terminating single-employer plans covered by the PBGC.

Document Excerpt

This final rule amends the Pension Benefit Guaranty Corporation’s regulations on Benefits Payable in Terminated Single-Employer Plans and Allocation of Assets in Single-Employer Plans to prescribe interest assumptions under the benefit payments regulation for valuation dates in January 2012 and interest assumptions under the asset allocation regulation for valuation dates in the first quarter of 2012. The interest assumptions are used for valuing and paying benefits under terminating single-employer plans covered by the pension insurance system administered by PBGC.

Link http://www.gpo.gov/fdsys/pkg/FR-2011-12-15/pdf/2011-32184.pdf

Technical Update 11-1

administrator — Wed, 07 Dec 2011 23:16:24 +0000

PBGC issues Technical Update 11-1 which extends the reportable events guidance of Technical Update 10-4 through the 2012 plan year.

Document Excerpt

This Technical Update 11-1 provides Pension Benefit Guaranty Corporation (“PBGC”) guidance for plan years beginning in 2012 on compliance with the reportable events requirements of section 4043 of the Employee Retirement Income Security Act of 1974 (“ERISA”) and PBGC’s regulation on Reportable Events and Certain Other Notification Requirements (29 CFR part 4043).

Link http://www.pbgc.gov/res/other-guidance/tu/tu11-1.html

Amendment to Allocation of Asset Regulations for Expected Retirement Ages

administrator — Tue, 06 Dec 2011 14:59:33 +0000

The PBGC amends its Allocation of Assets regulation by substituting a new table for determining expected retirement ages for plans undergoing a distress termination.

Document Excerpt

This rule amends 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 2012. This table is needed in order to compute the value of early retirement benefits and, thus, the total value of benefits under a plan.

Link http://www.pbgc.gov/documents/2011-30849.pdf

2012 Maximum Monthly Benefit

administrator — Fri, 25 Nov 2011 16:19:16 +0000

The PBGC releases the maximum monthly benefit subject to its guaranty for 2012.

Document Excerpt

Examples of the maximum guarantee are shown in the tables below. Each table applies to a given calendar year. The maximum guarantee is set by law and it is updated each calendar year. The maximum guarantee applicable to a plan is fixed as of that plan’s termination date except where termination occurs during a plan sponsor’s bankruptcy and the sponsor entered bankruptcy on or after September 16, 2006, in which case the maximum guarantee is fixed as of the date the sponsor entered bankruptcy.

Link http://www.pbgc.gov/wr/benefits/guaranteed-benefits/maximum-guarantee.html

December Lump Sum Interest Rate

administrator — Sun, 20 Nov 2011 17:00:02 +0000

The PBGC has released the interest rate applicable for December lump sums.

Document Excerpt

The immediate interest rate for valuing lump sum payments for the month of December 2011 is 1.50%. The deferred interest rate I₁ is 4.00%, I₂ is 4.00%, and I₃ is 4.00%. (The immediate interest rate for November 2011 was 1.50% for lump sum payments; the deferred interest rate I₁ was 4.00%, I₂ was 4.00%, and I₃ was 4.00%).

Link http://www.pbgc.gov/prac/interest/monthly/miru111511.html

PBGC Reports Record Deficit

administrator — Sun, 20 Nov 2011 16:56:26 +0000

The PBGC reports a record $26 Billion dollar deficit for 2011.

Document Excerpt

WASHINGTON—The Pension Benefit Guaranty Corporation today released its annual report for fiscal year 2011, which shows the agency’s deficit increased to $26 billion as of year-end, a $3 billion increase from the $23 billion reported last year. This is the largest deficit in PBGC’s 37-year history.

Link http://www.pbgc.gov/news/press/releases/pr12-06.html