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Title 29Subtitle BChapter XLSubchapter E → Part 4044


Title 29: Labor


PART 4044—ALLOCATION OF ASSETS IN SINGLE-EMPLOYER PLANS


Contents

Subpart A—Allocation of Assets

General Provisions

§4044.1   Purpose and scope.
§4044.2   Definitions.
§4044.3   General rule.
§4044.4   Violations.

Allocation of Assets To Benefit Categories

§4044.10   Manner of allocation.
§4044.11   Priority category 1 benefits.
§4044.12   Priority category 2 benefits.
§4044.13   Priority category 3 benefits.
§4044.14   Priority category 4 benefits.
§4044.15   Priority category 5 benefits.
§4044.16   Priority category 6 benefits.
§4044.17   Subclasses.

Allocation of Residual Assets

§4044.30   [Reserved]

Subpart B—Valuation of Benefits and Assets

General Provisions

§4044.41   General valuation rules.

Trusteed Plans

§4044.51   Benefits to be valued.
§4044.52   Valuation of benefits.
§4044.53   Mortality assumptions.
§4044.54   [Reserved]

Expected Retirement Age

§4044.55   XRA when a participant must retire to receive a benefit.
§4044.56   XRA when a participant need not retire to receive a benefit.
§4044.57   Special rule for facility closing.

Non-Trusteed Plans

§4044.71   Valuation of annuity benefits.
§4044.72   Form of annuity to be valued.
§4044.73   Lump sums and other alternative forms of distribution in lieu of annuities.
§4044.74   Withdrawal of employee contributions.
§4044.75   Other lump sum benefits.
Appendix A to Part 4044—Mortality Rate Tables
Appendix B to Part 4044—Interest Rates Used To Value Benefits
Appendix C to Part 4044—Loading Assumptions
Appendix D to Part 4044—Tables Used To Determine Expected Retirement Age

Authority: 29 U.S.C. 1301(a), 1302(b)(3), 1341, 1344, 1362.

Source: 61 FR 34059, July 1, 1996, unless otherwise noted.

Note: Certain provisions of part 4044 have been superseded by legislative changes. For example, there are references to provisions formerly codified in 29 CFR part 2617, subpart C (and to the Notice of Sufficiency provided for thereunder) that no longer exist because of changes in the PBGC's plan termination regulations in response to the Single-Employer Pension Plan Amendments Act of 1986 and the Pension Protection Act of 1987. The PBGC intends to amend part 4044 at a later date to conform it to current statutory provisions.

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Subpart A—Allocation of Assets

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General Provisions

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§4044.1   Purpose and scope.

This part implements section 4044 of ERISA, which contains rules for allocating a plan's assets when the plan terminates. These rules have been in effect since September 2, 1974, the date of enactment of ERISA. This part applies to any single-employer plan covered by title IV of ERISA that submits a notice of intent to terminate, or for which PBGC commences an action to terminate the plan under section 4042 of ERISA.

(a) Subpart A. Sections 4044.1 through 4044.4 set forth general rules for applying §§4044.10 through 4044.17. Sections 4044.10 through 4044.17 interpret the rules and describe procedures for allocating plan assets to priority categories 1 through 6.

(b) Subpart B. The purpose of subpart B is to establish the method of determining the value of benefits and assets under terminating single-employer pension plans covered by title IV of ERISA. This valuation is needed for both plans trusteed under title IV and plans which are not trusteed. For the former, the valuation is needed to allocate plan assets in accordance with subpart A of this part and to determine the amount of any plan asset insufficiency. For the latter, the valuation is needed to allocate assets in accordance with subpart A and to distribute the assets in accordance with subpart B of part 4041 of this chapter.

(1) Section 4044.41 sets forth the general provisions of subpart B and applies to all terminating single-employer plans. Sections 4044.51 through 4044.57 prescribe the benefit valuation rules for plans that are placed into trusteeship by PBGC, including (in §§4044.55 through 4044.57) the rules and procedures a plan administrator shall follow to determine the expected retirement age (XRA) for a plan participant entitled to early retirement benefits for whom the annuity starting date is not known as of the valuation date. This applies to all trusteed plans which have such early retirement benefits. The plan administrator shall determine an XRA under §4044.55, §4044.56 or §4044.57, as appropriate, for each active participant or participant with a deferred vested benefit who is entitled to an early retirement benefit and who as of the valuation date has not selected an annuity starting date.

(2) Sections 4044.71 through 4044.75 prescribe the benefit valuation rules for calculating the value of a benefit to be paid a participant or beneficiary under a terminating pension plan that is distributing assets where the plan has not been placed into trusteeship by PBGC.

[61 FR 34059, July 1, 1996, as amended at 76 FR 34605, June 14, 2011]

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§4044.2   Definitions.

(a) The following terms are defined in §4001.2 of this chapter: annuity, bankruptcy filing date, basic-type benefit, Code, distribution date, earliest retirement age at valuation date, ERISA, expected retirement age (XRA), fair market value, guaranteed benefit, insurer, IRS, irrevocable commitment, majority owner, mandatory employee contributions, nonbasic-type benefit, nonforfeitable benefit, non-PPA 2006 bankruptcy termination, normal retirement age, notice of intent to terminate, PBGC, person, plan, plan administrator, single-employer plan, termination date, unreduced retirement age (URA), and voluntary employee contributions.

(b) For purposes of this part:

Deferred annuity means an annuity under which the specified date or age at which payments are to begin occurs after the valuation date.

Early retirement benefit means an annuity benefit payable under the terms of the plan, under which the participant is entitled to begin receiving payments before his or her normal retirement age and which is not payable on account of the disability of the participant. It may be reduced according to the terms of the plan.

Non-trusteed plan means a single-employer plan which is able to close out by purchasing annuities in the private sector

Priority category means one of the categories contained in sections 4044 (a)(1) through (a)(6) of ERISA that establish the order in which plan assets are to be allocated.

Trusteed plan means a single-employer plan which has been placed into trusteeship by PBGC.

Valuation date means (1) for non-trusteed plans, the date of distribution and (2) for trusteed plans, the termination date.

(c) For purposes of subpart B of this part (unless otherwise required by the context):

Age means the participant's age at his or her nearest birthday and is determined by rounding the individual's exact age to the nearest whole year. Half years are rounded to the next highest year. This is also known as the “insurance age.”

(d) For purposes of §§4044.55 through 4044.57:

Monthly benefit means the guaranteed benefit payable by PBGC.

(e) For purposes of §§4044.71 through 4044.75:

Lump sum payable in lieu of an annuity means a benefit that is payable in a single installment and is derived from an annuity payable under the plan.

Other lump sum benefit means a benefit in priority category 5 or 6, determined under subpart A of this part, that is payable in a single installment (or substantially so) under the terms of the plan, and that is not derived from an annuity payable under the plan. The benefit may be a severance pay benefit, a death benefit or other single installment benefit.

[61 FR 34059, July 1, 1996, as amended at 67 FR 16959, Apr. 8, 2002; 74 FR 11035, Mar. 16, 2009; 76 FR 34605, June 14, 2011; 83 FR 49806, Oct. 3, 2018]

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§4044.3   General rule.

(a) Asset allocation. Upon the termination of a single-employer plan, the plan administrator shall allocate the plan assets available to pay for benefits under the plan in the manner prescribed by this subpart. Plan assets available to pay for benefits include all plan assets (valued according to §4044.41(b)) remaining after the subtraction of all liabilities, other than liabilities for future benefit payments, paid or payable from plan assets under the provisions of the plan. Liabilities include expenses, fees and other administrative costs, and benefit payments due before the allocation date. Except as provided in §4044.4(b), an irrevocable commitment by an insurer to pay a benefit, which commitment is in effect on the date of the asset allocation, is not considered a plan asset, and a benefit payable under such a commitment is excluded from the allocation process.

(b) Allocation date. For plans that close out under §4041.28 or §4041.50, assets shall be allocated as of the date plan assets are to be distributed. For other plans, assets shall be allocated as of the termination date.

[61 FR 34059, July 1, 1996, as amended at 76 FR 34605, June 14, 2011]

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§4044.4   Violations.

(a) General. A plan administrator violates ERISA if plan assets are allocated or distributed upon plan termination in a manner other than that prescribed in section 4044 of ERISA and this subpart, except as may be required to prevent disqualification of the plan under the Code and regulations thereunder.

(b) Distributions in anticipation of termination. A distribution, transfer, or allocation of assets to a participant or to an insurance company for the benefit of a participant, made in anticipation of plan termination, is considered to be an allocation of plan assets upon termination, and is covered by paragraph (a) of this section. In determining whether a distribution, transfer, or allocation of assets has been made in anticipation of plan termination PBGC will consider all of the facts and circumstances including—

(1) Any change in funding or operation procedures;

(2) Past practice with regard to employee requests for forms of distribution;

(3) Whether the distribution is consistent with plan provisions; and

(4) Whether an annuity contract that provides for a cutback based on the guarantee limits in subpart B of part 4022 of this chapter could have been purchased from an insurance company.

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Allocation of Assets To Benefit Categories

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§4044.10   Manner of allocation.

(a) General. The plan administrator shall allocate plan assets available to pay for benefits under the plan using the rules and procedures set forth in paragraphs (b) through (f) of this section, or any other procedure that results in each participant (or beneficiary) receiving the same benefits he or she would receive if the procedures in paragraphs (b) through (f) were followed.

(b) Assigning benefits. The basic-type and nonbasic-type benefits payable with respect to each participant in a terminated plan shall be assigned to one or more priority categories in accordance with §§4044.11 through 4044.16. Benefits derived from voluntary employee contributions, which are assigned only to priority category 1, are treated, under section 204(c)(4) of ERISA and section 411(d)(5) of the Code, as benefits under a separate plan. The amount of a benefit payable with respect to each participant shall be determined as of the termination date, but, in a PPA 2006 bankruptcy termination, subject to the limitations in sections 4022(g) and 4044(e) of ERISA (and corresponding provisions of these regulations).

(c) Valuing benefits. The value of a participant's benefit or benefits assigned to each priority category shall be determined, as of the allocation date, in accordance with the provisions of subpart B of this part. The value of each participant's basic-type benefit or benefits in a priority category shall be reduced by the value of the participant's benefit of the same type that is assigned to a higher priority category. Except as provided in the next two sentences, the same procedure shall be followed for nonbasic-type benefits. The value of a participant's nonbasic-type benefits in priority categories 3, 5, and 6 shall not be reduced by the value of the participant's nonbasic-type benefit assigned to priority category 2. Benefits in priority category 1 shall neither be included in nor subtracted from lower priority categories. In no event shall a benefit assigned to a priority category be valued at less than zero.

(d) Allocating assets to priority categories. Plan assets available to pay for benefits under the plan shall be allocated to each priority category in succession, beginning with priority category 1. If the plan has sufficient assets to pay for all benefits in a priority category, the remaining assets shall then be allocated to the next lower priority category. This process shall be repeated until all benefits in priority categories 1 through 6 have been provided or until all available plan assets have been allocated.

(e) Allocating assets within priority categories. Except for priority categories 4 and 5, if the plan assets available for allocation to any priority category are insufficient to pay for all benefits in that priority category, those assets shall be distributed among the participants according to the ratio that the value of each participant's benefit or benefits in that priority category bears to the total value of all benefits in that priority category. If the plan assets available for allocation to priority category 4 are insufficient to pay for all benefits in that category, the assets shall be allocated, first, to the value of all participants' nonforfeitable benefits that would be assigned to priority category 4 other than those impacted by the majority-owner limitation under §4022.26 of this chapter. If assets available for allocation to priority category 4 are sufficient to fully satisfy the value of those other benefits, the remaining assets shall then be allocated to the value of the benefits that would be guaranteed but for the majority-owner limitation. These remaining assets shall be distributed among the majority owners according to the ratio that the value of each majority owner's benefit that would be guaranteed but for the majority-owner limitation bears to the total value of all benefits that would be guaranteed but for the majority-owner limitation. If the plan assets available for allocation to priority category 5 are insufficient to pay for all benefits in that category, the assets shall be allocated, first, to the value of each participant's nonforfeitable benefits that would be assigned to priority category 5 under §4044.15 after reduction for the value of benefits assigned to higher priority categories, based only on the provisions of the plan in effect at the beginning of the five-year period immediately preceding the termination date. If assets available for allocation to priority category 5 are sufficient to fully satisfy the value of those benefits, assets shall then be allocated to the value of the benefit increase under the oldest amendment during the five-year period immediately preceding the termination date, reduced by the value of benefits assigned to higher priority categories (including higher subcategories in priority category 5). This allocation procedure shall be repeated for each succeeding plan amendment within the five-year period until all plan assets available for allocation have been exhausted. If an amendment decreased benefits, amounts previously allocated with respect to each participant in excess of the value of the reduced benefit shall be reduced accordingly. In the subcategory in which assets are exhausted, the assets shall be distributed among the participants according to the ratio that the value of each participant's benefit or benefits in that subcategory bears to the total value of all benefits in that subcategory.

(f) Applying assets to basic-type or nonbasic-type benefits within priority categories. The assets allocated to a participant's benefit or benefits within each priority category shall first be applied to pay for the participant's basic-type benefit or benefits assigned to that priority category. Any assets allocated on behalf of that participant remaining after satisfying the participant's basic-type benefit or benefits in that priority category shall then be applied to pay for the participant's nonbasic-type benefit or benefits assigned to that priority category. If the assets allocable to a participant's basic-type benefit or benefits in all priority categories are insufficient to pay for all of the participant's guaranteed benefits, the assets allocated to that participant's benefit in priority category 4 shall be applied, first, to the guaranteed portion of the participant's benefit in priority category 4. The remaining assets allocated to that participant's benefit in priority category 4, if any, shall be applied to the nonguaranteed portion of the participant's benefit.

(g) Allocation to established subclasses. Notwithstanding paragraphs (e) and (f) of this section, the assets of a plan that has established subclasses within any priority category may be allocated to the plan's subclasses in accordance with the rules set forth in §4044.17.

[61 FR 34059, July 1, 1996, as amended at 76 FR 34605, June 14, 2011; 83 FR 49806, Oct. 3, 2018]

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§4044.11   Priority category 1 benefits.

(a) Definition. The benefits in priority category 1 are participants' accrued benefits derived from voluntary employee contributions.

(b) Assigning benefits. Absent an election described in the next sentence, the benefit assigned to priority category 1 with respect to each participant is the balance of the separate account maintained for the participant's voluntary contributions. If a participant has elected to receive an annuity in lieu of his or her account balance, the benefit assigned to priority category 1 with respect to that participant is the present value of that annuity.

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§4044.12   Priority category 2 benefits.

(a) Definition. The benefits in priority category 2 are participants' accrued benefits derived from mandatory employee contributions, whether to be paid as an annuity benefit with a pre-retirement death benefit that returns mandatory employee contributions or, if a participant so elects under the terms of the plan and subpart A of part 4022 of this chapter, as a lump sum benefit. Benefits are primarily basic-type benefits although nonbasic-type benefits may also be included as follows:

(1) Basic-type benefits. The basic-type benefit in priority category 2 with respect to each participant is the sum of the values of the annuity benefit and the pre-retirement death benefit determined under the provisions of paragraph (c)(1) of this section.

(2) Nonbasic-type benefits. If a participant elects to receive a lump sum benefit and if the value of the lump sum benefit exceeds the value of the basic-type benefit in priority category 2 determined with respect to the participant, the excess is a nonbasic-type benefit. There is no nonbasic-type benefit in priority category 2 for a participant who does not elect to receive a lump sum benefit.

(b) Conversion of mandatory employee contributions to an annuity benefit. Subject to the limitation set forth in paragraph (b)(3) of this section, a participant's accumulated mandatory employee contributions shall be converted to an annuity form of benefit payable at the normal retirement age or, if the plan provides for early retirement, at the expected retirement age. The conversion shall be made using the interest rates and factors specified in paragraph (b)(2) of this section. The form of the annuity benefit (e.g., straight life annuity, joint and survivor annuity, cash refund annuity, etc.) is the form that the participant or beneficiary is entitled to on the termination date. If the participant does not have a nonforfeitable right to a benefit, other than the return of his or her mandatory contributions in a lump sum, the annuity form of benefit is the form the participant would be entitled to if the participant had a nonforfeitable right to an annuity benefit under the plan on the termination date.

(1) Accumulated mandatory employee contributions. Subject to any addition for the cost of ancillary benefits plus interest, as provided in the following sentence, the amount of the accumulated mandatory employee contributions for each participant is the participant's total nonforfeitable mandatory employee contributions remaining in the plan on the termination date plus interest, if any, under the plan provisions. Mandatory employee contributions, if any, used after the effective date of the minimum vesting standards in section 203 of ERISA and section 411 of the Code for costs or to provide ancillary benefits such as life insurance or health insurance, plus interest under the plan provisions, shall be added to the contributions that remain in the plan to determine the accumulated mandatory employee contributions.

(2) Interest rates and conversion factors. The interest rates and conversion factors used in the administration of the plan shall be used to convert a participant's accumulated mandatory contributions to the annuity form of benefit. In the absence of plan rules and factors, the interest rates and conversion factors established by the IRS for allocation of accrued benefits between employer and employee contributions under the provisions of section 204(c) of ERISA and section 411(c) of the Code shall be used.

(3) Minimum accrued benefit. The annuity benefit derived from mandatory employee contributions may not be less than the minimum accrued benefit under the provisions of section 204(c) of ERISA and section 411(c) of the Code.

(4) Rollover amounts. In the case of a benefit resulting from rollover amounts, notwithstanding the provisions of paragraph (b)(2) of this section, the interest rates and conversion factors in paragraph (c)(4) of this section are used to determine the portion of the accrued benefit derived from the employee's contributions and, if any, the portion of the accrued benefit derived from employer contributions.

(c) Assigning benefits. If a participant or beneficiary elects to receive a lump sum benefit, his or her benefit shall be determined under paragraph (c)(2) of this section. Otherwise, the benefits with respect to a participant shall be determined under paragraph (c)(1) of this section.

(1) Annuity benefit and pre-retirement death benefit. The annuity benefit and the pre-retirement death benefit assigned to priority category 2 with respect to a participant are determined as follows:

(i) The annuity benefit is the benefit computed under paragraph (b) of this section.

(ii) Except for adjustments necessary to meet the minimum lump sum requirements as hereafter provided, the pre-retirement death benefit is the benefit under the plan that returns all or a portion of the participant's mandatory employee contributions upon the death of the participant before retirement. A benefit that became payable in a single installment (or substantially so) because the participant died before the termination date is a liability of the plan within the meaning of §4044.3(a) and should not be assigned to priority category 2. A benefit payable upon a participant's death that is included in the annuity form of the benefit derived from mandatory employee contributions (e.g., the survivor's portion of a joint and survivor annuity or the cash refund portion of a cash refund annuity) is assigned to priority category 2 as part of the annuity benefit under paragraph (c)(1)(i) of this section and is not assigned as a death benefit. The pre-retirement death benefit may not be less than the minimum lump sum required upon withdrawal of mandatory employee contributions by the IRS under section 204(c) of ERISA and section 411(c) of the Code.

(2) Lump sum benefit. Except for adjustments necessary to meet the minimum lump sum requirements as hereafter provided, if a participant elects to receive a lump sum benefit under the provisions of the plan, the amount of the benefit that is assigned to priority category 2 with respect to the participant is—

(i) The combined value of the annuity benefit and the pre-retirement death benefit determined according to paragraph (c)(1) (which constitutes the basic-type benefit) plus

(ii) The amount, if any, of the participant's accumulated mandatory employee contributions that exceeds the combined value of the annuity benefit and the pre-retirement death benefit (which constitutes the nonbasic-type benefit), but not more than

(iii) The amount of the participant's accumulated mandatory contributions.

(3) For purposes of paragraph (c)(2) of this section, accumulated mandatory contributions means the contributions with interest, if any, payable under plan provisions to the participant or beneficiary on termination of the plan or, in the absence of such provisions, the amount that is payable if the participant withdrew his or her contributions on the termination date. The lump sum benefit may not be less than the minimum lump required by the IRS under section 204(c) of ERISA and section 411(c) of the Code upon withdrawal of mandatory employee contributions.

(4) Special rules for benefit resulting from rollover amounts—(i) Mandatory employee contributions. Notwithstanding paragraphs (c)(1) through (3) of this section, in the case of a benefit resulting from rollover amounts, the accrued benefit derived from mandatory employee contributions is determined using the interest rates and conversion factors under section 411(c)(2)(B) and (C) of the Code for purposes of computing an employee's accrued benefit derived from the employee's contributions. The annuity benefit and the pre-retirement death benefit, as determined on this basis, is the benefit resulting from rollover amounts in priority category 2.

(ii) Employer contributions. Any portion of a participant's accrued benefit resulting from rollover amounts that is in excess of the accrued benefit derived from mandatory employee contributions determined in accordance with paragraph (c)(4)(i) of this section (i.e., the accrued benefit derived from employer contributions) is a guaranteeable benefit in priority category 3, priority category 4, or priority category 5, as applicable under this part.

[61 FR 34059, July 1, 1996, as amended at 79 FR 70095, Nov. 25, 2014]

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§4044.13   Priority category 3 benefits.

(a) Definition. The benefits in priority category 3 are those annuity benefits that were in pay status before the beginning of the 3-year period ending on the termination date, and those annuity benefits that could have been in pay status (then or as of the next payment date under the plan's rules for starting benefit payments) for participants who, before the beginning of the 3-year period ending on the termination date, had reached their Earliest PBGC Retirement Date (as determined under §4022.10 of this chapter) based on plan provisions in effect on the day before the beginning of the 3-year period ending on the termination date. For example, in a plan with a termination date of September 1, 2012, the benefits in priority category 3 are those annuity benefits that were in pay status on or before September 1, 2009, and those annuity benefits that could have been in pay status for participants who, on or before September 1, 2009, had reached their Earliest PBGC Retirement Date based on plan provisions in effect on September 1, 2009. Benefit increases, as defined in §4022.2, that were in effect throughout the 5-year period ending on the termination date, including automatic benefit increases during that period to the extent provided in paragraph (b)(5) of this section, shall be included in determining the priority category 3 benefit. For example, in a plan with a termination date of September 1, 2012, a benefit increase that was in effect throughout the 5-year period from September 2, 2007, to September 1, 2012, is included in priority category 3. Benefits are primarily basic-type benefits, although nonbasic-type benefits will be included if any portion of a participant's priority category 3 benefit is not guaranteeable under the provisions of subpart A of part 4022 and §4022.21 of this chapter.

(b) Assigning benefits. The annuity benefit that is assigned to priority category 3 with respect to each participant is the lowest annuity that was paid or payable under the rules in paragraphs (b)(2) through (b)(6) of this section.

(1) Eligibility of participants and beneficiaries. A participant or beneficiary is eligible for a priority category 3 benefit if either of the following applies:

(i) The participant's (or beneficiary's) benefit was in pay status before the beginning of the 3-year period ending on the termination date.

(ii) Before the beginning of the 3-year period ending on the termination date, the participant was eligible for an annuity benefit that could have been in pay status and had reached his or her Earliest PBGC Retirement Date (as determined in §4022.10 of this chapter, based on plan provisions in effect on the day before the beginning of the 3-year period ending on the termination date). Whether a participant was eligible to receive an annuity before the beginning of the 3-year period shall be determined using the plan provisions in effect on the day before the beginning of the 3-year period.

(iii) If a participant described in either of the preceding two paragraphs died during the 3-year period ending on the date of the plan termination and his or her beneficiary is entitled to an annuity, the beneficiary is eligible for a priority category 3 benefit.

(2) Plan provisions governing determination of benefit. In determining the amount of the priority category 3 annuity with respect to a participant, the plan administrator shall use the participant's age, service, actual or expected retirement age, and other relevant facts as of the following dates:

(i) Except as provided in paragraph (b)(3), for a participant or beneficiary whose benefit was in pay status before the beginning of the 3-year period ending on the termination date, the priority category 3 benefit shall be determined according to plan provisions in effect on the date the benefit commenced. The form of annuity elected by a retiree is considered the normal form of annuity for that participant.

(ii) Except as provided in paragraph (b)(3), for a participant who was eligible to receive an annuity before the beginning of the 3-year period ending on the termination date but whose benefit was not in pay status, the priority category 3 benefit and the normal form of annuity shall be determined according to plan provisions in effect on the day before the beginning of the 3-year period ending on the termination date as if the benefit had commenced at that time.

(3) General benefit limitations. The general benefit limitation is determined as follows:

(i) If a participant's benefit was in pay status before the beginning of the 3-year period, the benefit assigned to priority category 3 with respect to that participant is limited to the lesser of the lowest annuity benefit in pay status during the 3-year period ending on the termination date and the lowest annuity benefit payable under the plan provisions at any time during the 5-year period ending on the termination date.

(ii) Unless a benefit was in pay status before the beginning of the 3-year period ending on the termination date, the benefit assigned to priority category 3 with respect to a participant is limited to the lowest annuity benefit payable under the plan provisions, including any reduction for early retirement, at any time during the 5-year period ending on the termination date. If the annuity form of benefit under a formula that appears to produce the lowest benefit differs from the normal annuity form for the participant under paragraph (b)(2)(ii) of this section, the benefits shall be compared after the differing form is converted to the normal annuity form, using plan factors. In the absence of plan factors, the factors in subpart B of part 4022 of this chapter shall be used.

(iii) For purposes of this paragraph, if a terminating plan has been in effect less than five years on the termination date, computed in accordance with paragraph (b)(6) of this section, the lowest annuity benefit under the plan during the 5-year period ending on the termination date is zero. If the plan is a successor to a previously established defined benefit plan within the meaning of section 4021(a) of ERISA, the time it has been in effect will include the time the predecessor plan was in effect.

(4) Determination of beneficiary's benefit. If a beneficiary is eligible for a priority category 3 benefit because of the death of a participant during the 3-year period ending on the termination date, the benefit assigned to priority category 3 for the beneficiary shall be determined as if the participant had died the day before the 3-year period began.

(5) Automatic benefit increases. If plan provisions adopted and effective on or before the first day of the 5-year period ending on the termination date provided for automatic increases in the benefit formula for both active participants and those in pay status or for participants in pay status only, the lowest annuity benefit payable during the 5-year period ending on the termination date determined under paragraph (b)(3) of this section includes the automatic increases scheduled during the fourth and fifth years preceding termination, subject to the restriction that benefit increases for active participants in excess of the increases for retirees shall not be taken into account.

(6) Computation of time periods. For purposes of this section, a plan or amendment is “in effect” on the later of the date on which it is adopted or the date it becomes effective.

(c) PPA 2006 bankruptcy termination. In a PPA 2006 bankruptcy termination:

(1) For purposes of this paragraph (c), “applicable pre-termination period” means the period—

(i) Beginning on the first day of the 5-year period ending on the bankruptcy filing date; and

(ii) Ending on the termination date. For example, if the bankruptcy filing date is January 15, 2008, and the termination date is March 22, 2009, the applicable pre-termination period is the period beginning on January 16, 2003, and ending on March 22, 2009.

(2) “Applicable pre-termination period” is substituted for “5-year period ending on the termination date” each place that “5-year period ending on the termination date” appears in paragraphs (a) and (b) of this section.

(3) Except as provided in paragraph (a)(2) of this section, “bankruptcy filing date” is substituted for “termination date” and “date of the plan termination” each place that “termination date” and “date of the plan termination” appear in paragraphs (a) and (b) of this section. In paragraph (b)(5) of this section, “the bankruptcy filing date” is substituted for “termination” in the phrase “during the fourth and fifth years preceding termination.”

(4) Example: A plan provides for normal retirement at age 65 and has only one early retirement benefit: a subsidized early retirement benefit for participants who terminate employment on or after age 60 with 20 years of service. These plan provisions have been unchanged since 1990. The contributing sponsor of the plan files a bankruptcy petition in June 2008, and the plan terminates during the bankruptcy with a termination date in September 2010. A participant retired in July 2007, at which time he was age 60 and had 20 years of service, and began receiving the subsidized early retirement benefit. The participant has no benefit in priority category 3, because he was not eligible to retire three or more years before the June 2008 bankruptcy filing date.

[61 FR 34059, July 1, 1996, as amended at 62 FR 67729, Dec. 30, 1997; 67 FR 16959, Apr. 8, 2002; 67 FR 38003, May 31, 2002; 76 FR 34605, June 14, 2011]

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§4044.14   Priority category 4 benefits.

The benefits assigned to priority category 4 with respect to each participant are the participant's guaranteed benefits, except as provided in the next sentence. The benefit assigned to priority category 4 with respect to a participant is not limited by the aggregate benefits limitations set forth in §4022B.1 of this chapter for individuals who are participants in more than one plan or by the guarantee limitation applicable to majority owners set forth in §4022.26.

[61 FR 34059, July 1, 1996, as amended at 76 FR 34606, June 14, 2011; 83 FR 49806, Oct. 3, 2018]

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§4044.15   Priority category 5 benefits.

The benefits assigned to priority category 5 with respect to each participant are all of the participant's nonforfeitable benefits under the plan.

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§4044.16   Priority category 6 benefits.

The benefits assigned to priority category 6 with respect to each participant are all of the participant's benefits under the plan, whether forfeitable or nonforfeitable.

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§4044.17   Subclasses.

(a) General rule. A plan may establish one or more subclasses within any priority category, other than priority categories 1 and 2, which subclasses will govern the allocation of assets within that priority category. The subclasses may be based only on a participant's longer service, older age, or disability, or any combination thereof.

(b) Limitation. Except as provided in paragraph (c) of this section, whenever the allocation within a priority category on the basis of the subclasses established by the plan increases or decreases the cumulative amount of assets that otherwise would be allocated to guaranteed benefits, the assets so shifted shall be reallocated to other participants' benefits within the priority category in accordance with the subclasses.

(c) Exception for subclasses in effect on September 2, 1974. A plan administrator may allocate assets to subclasses within any priority category, other than priority categories 1 and 2, without regard to the limitation in paragraph (b) of this section if, on September 2, 1974, the plan provided for allocation of plan assets upon termination of the plan based on a participant's longer service, older age, or disability, or any combination thereof, and—

(1) Such provisions are still in effect; or

(2) The plan, if subsequently amended to modify or remove those subclasses, is re-amended to re-establish the same subclasses on or before July 28, 1981.

(d) Discrimination under Code. Notwithstanding the provisions of paragraphs (a) through (c) of this section, allocation of assets to subclasses established under this section is permitted only to the extent that the allocation does not result in discrimination prohibited under the Code and regulations thereunder.

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Allocation of Residual Assets

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§4044.30   [Reserved]

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Subpart B—Valuation of Benefits and Assets

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General Provisions

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§4044.41   General valuation rules.

(a) Valuation of benefits—(1) Trusteed plans. The plan administrator of a plan that has been or will be placed into trusteeship by the PBGC shall value plan benefits in accordance with §§4044.51 through 4044.57.

(2) Non-trusteed plans. The plan administrator of a non-trusteed plan shall value plan benefits in accordance with §§4044.71 through 4044.75. If a plan is unable to satisfy all benefits assigned to priority categories 1 through 4 on the distribution date, the PBGC will place it into trusteeship and the plan administrator shall re-value the benefits in accordance with §§4044.51 through 4044.57.

(b) Valuation of assets. Plan assets shall be valued at their fair market value, based on the method of valuation that most accurately reflects such fair market value.

[61 FR 34059, July 1, 1996, as amended at 76 FR 34606, June 14, 2011]

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Trusteed Plans

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§4044.51   Benefits to be valued.

(a) Form of benefit. The plan administrator shall determine the form of each benefit to be valued in accordance with the following rules:

(1) If a benefit is in pay status as of the valuation date, the plan administrator shall value the form of the benefit being paid.

(2) If a benefit is not in pay status as of the valuation date but a valid election with respect to the form of benefit has been made on or before the valuation date, the plan administrator shall value the form of benefit so elected.

(3) If a benefit is not in pay status as of the valuation date and no valid election with respect to the form of benefit has been made on or before the valuation date, the plan administrator shall value the form of benefit that, under the terms of the plan, is payable in the absence of a valid election.

(b) Timing of benefit. The plan administrator shall value benefits whose starting date is subject to election using the assumption specified in paragraph (b)(1) or (b)(2) of this section.

(1) Where election made. If a valid election of the starting date of a benefit has been made on or before the valuation date, the plan administrator shall assume that the starting date of the benefit is the starting date so elected.

(2) Where no election made. If no valid election of the starting date of a benefit has been made on or before the valuation date, the plan administrator shall assume that the starting date of the benefit is the later of—

(i) The expected retirement age, as determined under §§4044.55 through 4044.57, of the participant with respect to whom the benefit is payable, or

(ii) The valuation date.

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§4044.52   Valuation of benefits.

The plan administrator shall value all benefits as of the valuation date by—

(a) Using the mortality assumptions prescribed by §4044.53 and the interest assumptions prescribed in appendix B to this part;

(b) Using interpolation methods, where necessary, at least as accurate as linear interpolation;

(c) Using valuation formulas that accord with generally accepted actuarial principles and practices; and

(d) Adjusting the values to reflect loading expenses in accordance with appendix C to this part.

[65 FR 14753, Mar. 17, 2000, as amended at 70 FR 72207, Dec. 2, 2005]

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§4044.53   Mortality assumptions.

(a) General rule. Subject to paragraph (b) of this section (regarding certain death benefits), the plan administrator shall use the mortality factors prescribed in paragraphs (c), (d), (e), (f), and (g) of this section to value benefits under §4044.52.

(b) Certain death benefits. If an annuity for one person is in pay status on the valuation date, and if the payment of a death benefit after the valuation date to another person, who need not be identifiable on the valuation date, depends in whole or in part on the death of the pay status annuitant, then the plan administrator shall value the death benefit using—

(1) The mortality rates that are applicable to the annuity in pay status under this section to represent the mortality of the pay status annuitant; and

(2) The mortality rates under paragraph (c) of this section to represent the mortality of the death beneficiary.

(c) Healthy lives. If the individual is not disabled under paragraph (f) of this section, the plan administrator will value the benefit using—

(1) For male participants, the rates in Table 1 of appendix A to this part projected from 1994 to the calendar year in which the valuation date occurs plus 10 years using Scale AA from Table 2 of appendix A to this part; and

(2) For female participants, the rates in Table 3 of appendix A to this part projected from 1994 to the calendar year in which the valuation date occurs plus 10 years using Scale AA from Table 4 of appendix A to this part.

(d) Social Security disabled lives. If the individual is Social Security disabled under paragraph (f)(1) of this section, the plan administrator will value the benefit using—

(1) For male participants, the rates in Table 5 of appendix A to this part; and

(2) For female participants, the rates in Table 6 of appendix A to this part.

(e) Non-Social Security disabled lives. If the individual is non-Social Security disabled under paragraph (f)(2) of this section, the plan administrator will value the benefit at each age using—

(1) For male participants, the lesser of—

(i) The rate determined from Table 1 of appendix A to this part projected from 1994 to the calendar year in which the valuation date occurs plus 10 years using Scale AA from Table 2 of appendix A to this part and setting the resulting table forward three years, or

(ii) The rate in Table 5 of appendix A to this part.

(2) For female participants, the lesser of—

(i) The rate determined from Table 3 of appendix A to this part projected from 1994 to the calendar year in which the valuation date occurs plus 10 years using Scale AA from Table 4 of appendix A to this part and setting the resulting table forward three years, or

(ii) The rate in Table 6 of appendix A to this part.

(f) Definitions of disability—(1) Social Security disabled. A participant is Social Security disabled if, on the valuation date, the participant is less than age 65 and has a benefit in pay status that—

(i) Is being received as a disability benefit under a plan provision requiring either receipt of or eligibility for Social Security disability benefits, or

(ii) Was converted under the plan's terms from a disability benefit under a plan provision requiring either receipt of or eligibility for Social Security disability benefits to an early or normal retirement benefit for any reason other than a change in the participant's health status.

(2) Non-Social Security disabled. A participant is non-Social Security disabled if, on the valuation date, the participant is less than age 65, is not Social Security disabled, and has a benefit in pay status that—

(i) Is being received as a disability benefit under the plan, or

(ii) Was converted under the plan's terms from a disability benefit to an early or normal retirement benefit for any reason other than a change in the participant's health status.

(g) Contingent annuitant mortality during deferral period. If a participant's joint and survivor benefit is valued as a deferred annuity, the mortality of the contingent annuitant during the deferral period will be disregarded.

[70 FR 72207, Dec. 2, 2005]

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§4044.54   [Reserved]

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Expected Retirement Age

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§4044.55   XRA when a participant must retire to receive a benefit.

(a) Applicability. Except as provided in §4044.57, the plan administrator shall determine the XRA under this section when plan provisions or established plan practice require a participant to retire from his or her job to begin receiving an early retirement benefit.

(b) Data needed. The plan administrator shall determine for each participant who is entitled to an early retirement benefit—

(1) The amount of the participant's monthly benefit payable at unreduced retirement age in the normal form payable under the terms of the plan or in the form validly elected by the participant before the termination date;

(2) The calendar year in which the participant reaches unreduced retirement age (“URA”);

(3) The participant's URA; and

(4) The participant's earliest retirement age at the valuation date.

(c) Procedure. (1) The plan administrator shall determine whether a participant is in the high, medium or low retirement rate category using the applicable Selection of Retirement Rate Category Table in appendix D, based on the participant's benefit determined under paragraph (b)(1) of this section and the year in which the participant reaches URA.

(2) Based on the retirement rate category determined under paragraph (c)(1), the plan administrator shall determine the XRA from Table II-A, II-B or II-C, as appropriate, by using the participant's URA and earliest retirement age at valuation date.

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§4044.56   XRA when a participant need not retire to receive a benefit.

(a) Applicability. Except as provided in §4044.57, the plan administrator shall determine the XRA under this section when plan provisions or established plan practice do not require a participant to retire from his or her job to begin receiving his or her early retirement benefit.

(b) Data needed. The plan administrator shall determine for each participant—

(1) The participant's URA; and

(2) The participant's earliest retirement age at valuation date.

(c) Procedure. Participants in this case are always assigned to the high retirement rate category and therefore the plan administrator shall use Table II-C of appendix D to determine the XRA. The plan administrator shall determine the XRA from Table II-C by using the participant's URA and earliest retirement age at termination date.

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§4044.57   Special rule for facility closing.

(a) Applicability. The plan administrator shall determine the XRA under this section, rather than §4044.55 or §4044.56, when both the conditions set forth in paragraphs (a)(1) and (a)(2) of this section exist.

(1) The facility at which the participant is or was employed permanently closed within one year before the valuation date, or is in the process of being permanently closed on the valuation date.

(2) The participant left employment at the facility less than one year before the valuation date or was still employed at the facility on the valuation date.

(b) XRA. The XRA is equal to the earliest retirement age at valuation date.

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Non-Trusteed Plans

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§4044.71   Valuation of annuity benefits.

The value of a benefit which is to be paid as an annuity is the cost of purchasing the annuity on the date of distribution from an insurer.

[61 FR 34059, July 1, 1996, as amended at 76 FR 34606, June 14, 2011]

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§4044.72   Form of annuity to be valued.

(a) When both the participant and beneficiary are alive on the date of distribution, the form of annuity to be valued is—

(1) For a participant or beneficiary already receiving a monthly benefit, that form which is being received, or

(2) For a participant or beneficiary not receiving a monthly benefit, the normal annuity form payable under the plan or the optional form for which the participant has made a valid election.

(b) When the participant dies after the date of plan termination but before the date of distribution, the form of annuity to be valued is determined under paragraph (b)(1) or (b)(2) of this section:

(1) For a participant who was entitled to a deferred annuity—

(i) If the form was a single or joint life annuity, no benefit shall be valued; or

(ii) If the participant had made a valid election of a lump sum benefit before he or she died, the form to be valued is the lump sum.

(2) For a participant who was eligible for immediate retirement, and for a participant who was in pay status at the date of termination—

(i) If the form was a single life annuity, no benefit shall be valued;

(ii) If the form was an annuity for a period certain and life thereafter, the form to be valued is an annuity for the certain period;

(iii) If the form was a joint and survivor annuity, the form to be valued is a single life annuity payable to the beneficiary, unless the beneficiary has also died, in which case no benefit shall be valued;

(iv) If the form was an annuity for a period certain and joint and survivor thereafter, the form to be valued is an annuity for the certain period and the life of the beneficiary thereafter, unless the beneficiary has also died, in which case the form to be valued is an annuity for the certain period;

(v) If the form was a cash refund annuity, the form to be valued is the remaining lump sum death benefit; or

(vi) If the participant had elected a lump sum benefit before he or she died, the form to be valued is the lump sum.

(c) When the participant is still living and the named beneficiary or spouse dies after the date of termination but before the date of distribution, the form of annuity to be valued is determined under paragraph (c)(1) or (c)(2) of this section:

(1) For a participant entitled to a deferred annuity—

(i) If the form was a joint and survivor annuity, the form to be valued is a single life annuity payable to the participant; or

(ii) If the form was an annuity for a period certain and joint and survivor thereafter, the form to be valued is an annuity for the certain period and the life of the participant thereafter.

(2) For a participant eligible for immediate retirement and for a participant in pay status at the date of termination—

(i) If the form was a joint and survivor annuity, the form to be valued is a single life annuity payable to the participant; or

(ii) If the form was an annuity for a period certain and joint survivor thereafter annuity, the form to be valued is an annuity for the certain period and for the life of the participant thereafter.

[61 FR 34059, July 1, 1996, as amended at 76 FR 34606, June 14, 2011]

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§4044.73   Lump sums and other alternative forms of distribution in lieu of annuities.

(a) Valuation. (1) The value of the lump sum or other alternative form of distribution is the present value of the normal form of benefit provided by the plan payable at normal retirement age, determined as of the date of distribution using reasonable actuarial assumptions as to interest and mortality.

(2) If the participant dies before the date of distribution, but had elected a lump sum benefit, the present value shall be determined as if the participant were alive on the date of distribution.

(b) Actuarial assumptions. The plan administrator shall specify the actuarial assumptions used to determine the value calculated under paragraph (a) of this section when the plan administrator submits the benefit valuation data to the PBGC. The same actuarial assumptions shall be used for all such calculations. The PBGC reserves the right to review the actuarial assumptions used and to re-value the benefits determined by the plan administrator if the actuarial assumptions are found to be unreasonable.

[61 FR 34059, July 1, 1996, as amended at 76 FR 34606, June 14, 2011]

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§4044.74   Withdrawal of employee contributions.

(a) If a participant has not started to receive monthly benefit payments on the date of distribution, the value of the lump sum which returns mandatory employee contributions is equal to the total amount of contributions made by the participant, plus interest that is payable to the participant under the terms of the plan, plus interest on that total amount from the date of termination to the date of distribution. The rate of interest credited on employee contributions up to the date of termination shall be the greater of the interest rate provided under the terms of the plan or the interest rate required under section 204(c) of ERISA or section 411(c) of the IRC.

(b) If a participant has started to receive monthly benefit payments on the date of distribution, part of which are attributable to his or her contributions, the value of the lump sum which returns employee contributions is equal to the excess of the amount described in paragraph (b)(1) of this section over the amount computed in paragraph (b)(2) of this section.

(1) The amount of accumulated mandatory employee contributions remaining in the plan as of the date of termination plus interest from the date of termination to the date of distribution.

(2) The excess of benefit payments made from the plan between date of plan termination and the date of distribution, over the amount of payments that would have been made if the employee contributions had been paid as a lump sum on the date of plan termination, with interest accumulated on the excess from the date of payment to the date of distribution.

(c) Interest assumptions. The interest rate used under this section to credit interest between the date of termination to the date of distribution shall be a reasonable rate and shall be the same for both paragraphs (a) and (b).

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§4044.75   Other lump sum benefits.

The value of a lump sum benefit which is not covered under §4044.73 or §4044.74 is equal to—

(a) The value under the irrevocable commitment, if an insurer provides the benefit; or

(b) The present value of the benefit as of the date of distribution, determined using reasonable actuarial assumptions, if the benefit is to be distributed other than by the purchase of the benefit from an insurer. The PBGC reserves the right to review the actuarial assumptions as to reasonableness and re-value the benefit if the actuarial assumptions are unreasonable.

[61 FR 34059, July 1, 1996, as amended at 76 FR 34606, June 14, 2011]

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Appendix A to Part 4044—Mortality Rate Tables

The mortality tables in this appendix set forth for each age x the probability qX that an individual aged x (in 1994, when using Table 1 or Table 3) will not survive to attain age x + 1. The projection scales in this appendix set forth for each age x the annual reduction AAX in the mortality rate at age x.

Table 1—Mortality Table for Healthy Male Participants

[94 GAM basic]

Age x qX
150.000371
160.000421
170.000463
180.000495
190.000521
200.000545
210.000570
220.000598
230.000633
240.000671
250.000711
260.000749
270.000782
280.000811
290.000838
300.000862
310.000883
320.000902
330.000912
340.000913
350.000915
360.000927
370.000958
380.001010
390.001075
400.001153
410.001243
420.001346
430.001454
440.001568
450.001697
460.001852
470.002042
480.002260
490.002501
500.002773
510.003088
520.003455
530.003854
540.004278
550.004758
560.005322
570.006001
580.006774
590.007623
600.008576
610.009663
620.010911
630.012335
640.013914
650.015629
660.017462
670.019391
680.021354
690.023364
700.025516
710.027905
720.030625
730.033549
740.036614
750.040012
760.043933
770.048570
780.053991
790.060066
800.066696
810.073780
820.081217
830.088721
840.096358
850.104559
860.113755
870.124377
880.136537
890.149949
900.164442
910.179849
920.196001
930.213325
940.231936
950.251189
960.270441
970.289048
980.306750
990.323976
1000.341116
1010.358560
1020.376699
1030.396884
1040.418855
1050.440585
1060.460043
1070.475200
1080.485670
1090.492807
1100.497189
1110.499394
1120.500000
1130.500000
1140.500000
1150.500000
1160.500000
1170.500000
1180.500000
1190.500000
1201.000000

Table 2—Projection Scale AA for Healthy Male Participants

Age x AAX
150.019
160.019
170.019
180.019
190.019
200.019
210.018
220.017
230.015
240.013
250.010
260.006
270.005
280.005
290.005
300.005
310.005
320.005
330.005
340.005
350.005
360.005
370.005
380.006
390.007
400.008
410.009
420.010
430.011
440.012
450.013
460.014
470.015
480.016
490.017
500.018
510.019
520.020
530.020
540.020
550.019
560.018
570.017
580.016
590.016
600.016
610.015
620.015
630.014
640.014
650.014
660.013
670.013
680.014
690.014
700.015
710.015
720.015
730.015
740.015
750.014
760.014
770.013
780.012
790.011
800.010
810.009
820.008
830.008
840.007
850.007
860.007
870.006
880.005
890.005
900.004
910.004
920.003
930.003
940.003
950.002
960.002
970.002
980.001
990.001
1000.001
1010.000
1020.000
1030.000
1040.000
1050.000
1060.000
1070.000
1080.000
1090.000
1100.000
1110.000
1120.000
1130.000
1140.000
1150.000
1160.000
1170.000
1180.000
1190.000
1200.000

Table 3—Mortality Table for Healthy Female Participants

[94 GAM Basic]

Age x qX
150.000233
160.000261
170.000281
180.000293
190.000301
200.000305
210.000308
220.000311
230.000313
240.000313
250.000313
260.000316
270.000324
280.000338
290.000356
300.000377
310.000401
320.000427
330.000454
340.000482
350.000514
360.000550
370.000593
380.000643
390.000701
400.000763
410.000826
420.000888
430.000943
440.000992
450.001046
460.001111
470.001196
480.001297
490.001408
500.001536
510.001686
520.001864
530.002051
540.002241
550.002466
560.002755
570.003139
580.003612
590.004154
600.004773
610.005476
620.006271
630.007179
640.008194
650.009286
660.010423
670.011574
680.012648
690.013665
700.014763
710.016079
720.017748
730.019724
740.021915
750.024393
760.027231
770.030501
780.034115
790.038024
800.042361
810.047260
820.052853
830.058986
840.065569
850.072836
860.081018
870.090348
880.100882
890.112467
900.125016
910.138442
920.152660
930.167668
940.183524
950.200229
960.217783
970.236188
980.255605
990.276035
1000.297233
1010.318956
1020.340960
1030.364586
1040.389996
1050.415180
1060.438126
1070.456824
1080.471493
1090.483473
1100.492436
1110.498054
1120.500000
1130.500000
1140.500000
1150.500000
1160.500000
1170.500000
1180.500000
1190.500000
1201.000000

Table 4—Projection Scale AA for Healthy Female Participants

Age x AAX
150.016
160.015
170.014
180.014
190.015
200.016
210.017
220.017
230.016
240.015
250.014
260.012
270.012
280.012
290.012
300.010
310.008
320.008
330.009
340.010
350.011
360.012
370.013
380.014
390.015
400.015
410.015
420.015
430.015
440.015
450.016
460.017
470.018
480.018
490.018
500.017
510.016
520.014
530.012
540.010
550.008
560.006
570.005
580.005
590.005
600.005
610.005
620.005
630.005
640.005
650.005
660.005
670.005
680.005
690.005
700.005
710.006
720.006
730.007
740.007
750.008
760.008
770.007
780.007
790.007
800.007
810.007
820.007
830.007
840.007
850.006
860.005
870.004
880.004
890.003
900.003
910.003
920.003
930.002
940.002
950.002
960.002
970.001
980.001
990.001
1000.001
1010.000
1020.000
1030.000
1040.000
1050.000
1060.000
1070.000
1080.000
1090.000
1100.000
1110.000
1120.000
1130.000
1140.000
1150.000
1160.000
1170.000
1180.000
1190.000
1200.000

Table 5—Mortality Table for Social Security Disabled Male Participants

Age x qX
150.022010
160.022502
170.023001
180.023519
190.024045
200.024583
210.025133
220.025697
230.026269
240.026857
250.027457
260.028071
270.028704
280.029345
290.029999
300.030661
310.031331
320.032006
330.032689
340.033405
350.034184
360.034981
370.035796
380.036634
390.037493
400.038373
410.039272
420.040189
430.041122
440.042071
450.043033
460.044007
470.044993
480.045989
490.046993
500.048004
510.049021
520.050042
530.051067
540.052093
550.053120
560.054144
570.055089
580.056068
590.057080
600.058118
610.059172
620.060232
630.061303
640.062429
650.063669
660.065082
670.066724
680.068642
690.070834
700.073284
710.075979
720.078903
730.082070
740.085606
750.088918
760.092208
770.095625
780.099216
790.103030
800.107113
810.111515
820.116283
830.121464
840.127108
850.133262
860.139974
870.147292
880.155265
890.163939
900.173363
910.183585
920.194653
930.206615
940.219519
950.234086
960.248436
970.263954
980.280803
990.299154
1000.319185
1010.341086
1020.365052
1030.393102
1040.427255
1050.469531
1060.521945
1070.586518
1080.665268
1090.760215
1101.000000

Table 6—Mortality Table for social Security Disabled Female Participants

Age x qX
150.007777
160.008120
170.008476
180.008852
190.009243
200.009650
210.010076
220.010521
230.010984
240.011468
250.011974
260.012502
270.013057
280.013632
290.014229
300.014843
310.015473
320.016103
330.016604
340.017121
350.017654
360.018204
370.018770
380.019355
390.019957
400.020579
410.021219
420.021880
430.022561
440.023263
450.023988
460.024734
470.025504
480.026298
490.027117
500.027961
510.028832
520.029730
530.030655
540.031609
550.032594
560.033608
570.034655
580.035733
590.036846
600.037993
610.039176
620.040395
630.041653
640.042950
650.044287
660.045666
670.046828
680.048070
690.049584
700.051331
710.053268
720.055356
730.057573
740.059979
750.062574
760.065480
770.068690
780.072237
790.076156
800.080480
810.085243
820.090480
830.096224
840.102508
850.109368
860.116837
870.124948
880.133736
890.143234
900.153477
910.164498
920.176332
930.189011
940.202571
950.217045
960.232467
970.248870
980.266289
990.284758
1000.303433
1010.327385
1020.359020
1030.395842
1040.438360
1050.487816
1060.545886
1070.614309
1080.694884
1090.789474
1101.000000

[70 FR 72208, Dec. 2, 2005; 70 FR 73330, Dec. 9, 2005]

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Appendix B to Part 4044—Interest Rates Used To Value Benefits

[This table sets forth, for each indicated calendar month, the interest rates (denoted by i1, i2, .  .  ., and referred to generally as it) assumed to be in effect between specified anniversaries of a valuation date that occurs within that calendar month; those anniversaries are specified in the columns adjacent to the rates. The last listed rate is assumed to be in effect after the last listed anniversary date.]

For valuation dates occurring in the month— The values of it are:
it for t= it for t= it for t=
November 1993.05601-25.0525>N/AN/A
December 1993.05601-25.0525>25N/AN/A
January 1994.05901-25.0525>25N/AN/A
February 1994.05901-25.0525>25N/AN/A
March 1994.05801-25.0525>25N/AN/A
April 1994.06201-25.0525>25N/AN/A
May 1994.06501-25.0525>25N/AN/A
June 1994.06701-25.0525>25N/AN/A
July 1994.06901-25.0525>25N/AN/A
August 1994.07001-25.0525>25N/AN/A
September 1994.06901-25.0525>25N/AN/A
October 1994.07001-25.0525>25N/AN/A
November 1994.07301-25.0525>25N/AN/A
December 1994.07501-25.0525>25N/AN/A
January 1995.07501-20.0575>20N/AN/A
February 1995.07301-20.0575>20N/AN/A
March 1995.07301-20.0575>20N/AN/A
April 1995.07101-20.0575>20N/AN/A
May 1995.06901-20.0575>20N/AN/A
June 1995.06801-20.0575>20N/AN/A
July 1995.06301-20.0575>20N/AN/A
August 1995.06201-20.0575>20N/AN/A
September 1995.06401-20.0575>20N/AN/A
October 1995.06301-20.0575>20N/AN/A
November 1995.06201-20.0575>20N/AN/A
December 1995.06001-20.0575>20N/AN/A
January 1996.05601-20.0475>20N/AN/A
February 1996.05401-20.0475>20N/AN/A
March 1996.05501-20.0475>20N/AN/A
April 1996.05801-20.0475>20N/AN/A
May 1996.06001-20.0475>20N/AN/A
June 1996.06201-20.0475>20N/AN/A
July 2006.06301-20.0475>20N/AN/A
August 1996.06301-20.0475>20N/AN/A
September 1996.06301-20.0475>20N/AN/A
October 1996.06301-20.0475>20N/AN/A
November 1996.06201-20.0475>20N/AN/A
December 1996.06001-20.0475>20N/AN/A
January 1997.05801-25.0500>25N/AN/A
February 1997.05901-25.0500>25N/AN/A
March 1997.06201-25.0500>25N/AN/A
April 1997.06101-25.0500>25N/AN/A
May 1997.06301-25.0500>25N/AN/A
June 1997.06401-25.0500>25N/AN/A
July 1997.06301-25.0500>25N/AN/A
August 1997.06101-25.0500>25N/AN/A
September 1997.05701-25.0500>25N/AN/A
October 1997.05901-25.0500>25N/AN/A
November 1997.05701-25.0500>25N/AN/A
December 1997.05601-25.0500>25N/AN/A
January 1998.05601-25.0525>25N/AN/A
February 1998.05501-25.0525>25N/AN/A
March 1998.05501-25.0525>25N/AN/A
April 1998.05501-25.0525>25N/AN/A
May 1998.05601-25.0525>25N/AN/A
June 1998.05601-25.0525>25N/AN/A
July 1998.05501-25.0525>25N/AN/A
August 1998.05401-25.0525>25N/AN/A
September 1998.05401-25.0525>25N/AN/A
October 1998.05401-25.0525>25N/AN/A
November 1998.05301-25.0525>25N/AN/A
December 1998.05401-25.0525>25N/AN/A
January 1999.05301-20.0525>20N/AN/A
February 1999.05401-20.0525>20N/AN/A
March 1999.05301-20.0525>20N/AN/A
April 1999.05601-20.0525>20N/AN/A
May 1999.05701-20.0525>20N/AN/A
June 1999.05701-20.0525>20N/AN/A
July 1999.06001-20.0525>20N/AN/A
August 1999.06301-20.0525>20N/AN/A
September 1999.06301-20.0525>20N/AN/A
October 1999.06301-20.0525>20N/AN/A
November 1999.06301-20.0525>20N/AN/A
December 1999.06501-20.0525>20N/AN/A
January 2000.06901-25.0625>25N/AN/A
February 2000.07101-25.0625>25N/AN/A
March 2000.07101-25.0625>25N/AN/A.
April 2000.07101-25.0625>25N/AN/A
May 2000.07001-25.0625>25N/AN/A
June 2000.07101-25.0625>25N/AN/A
July 2000.07401-250625>25N/AN/A
August 2000.07101-25.0625>25N/AN/A
September 2000.0701-25.0625  25N/AN/A
October 2000.07001-25.0625>25N/AN/A
November 2000.07101-25.0625>25N/AN/A
December 2000.07001-25.0625>25N/AN/A
January 2001.06701-20.0625>20N/AN/A
February 2001.06501-20.0625>20N/AN/A
March 2001.06401-20.0625>20N/AN/A
April 2001.06401-20.0625>20N/AN/A
May 2001.06401-20.0625>20N/AN/A
June 2001.06601-20.0625>20N/AN/A
July 2001.06601-20.0625>20N/AN/A
August 2001.06401-20.0625>20N/AN/A
September 2001.06301-20.0625>20N/AN/A
October 2001.06101-20.0625>20N/AN/A
November 2001.06501-20.0625>20N/AN/A
December 2001.06101-20.0625>20N/AN/A
January 2002.05801-25.0425>25N/AN/A
February 2002.05801-25.0425>25N/AN/A
March 2002.05601-25.0425>25N/AN/A
April 2002.05501-25.0425>25N/AN/A
May 2002.05901-25.0425>25N/AN/A
June 2002.05701-25.0425>25N/AN/A
July 2002.05701-25.0425>25N/AN/A
August 2002.05501-25.0425>25N/AN/A
September 2002.05401-25.042525N/AN/A
October 2002.05301-25.0425>25N/AN/A
November 2002.05001-25.0425>25N/AN/A
December 2002.05301-25.0425>25N/AN/A
January 2003.05301-20.0525>20N/AN/A
February 2003.05101-20.0525>20N/AN/A
March 2003.05101-20.0525>20N/AN/A
April 2003.04901-20.0525>20N/AN/A
May 2003.04901-20.0525>20N/AN/A
June 2003.04701-20.0525>20N/AN/A
July 2003.04301-20.0525>20N/AN/A
August 2003.04401-20.0525>20N/AN/A
September 2003.04901-20.0525>20N/AN/A
October 2003.04901-20.0525>20N/AN/A
November 2003.04601-20.052520N/AN/A
December 2003.04701-20.0525>20N/AN/A
January 2004.04201-20.0500>20N/AN/A
February 2004.04101-20.0500>20N/AN/A
March 2004.04101-20.0500>20N/AN/A
April 2004.04001-20.0500>20N/AN/A
May 2004.03901-20.0500>20N/AN/A
June 2004.04301-20.0500>20N/AN/A
July 2004.04501-20.0500>20N/AN/A
August 2004.04301-20.0500>20N/AN/A
September 2004.04201-20.0500>20N/AN/A
October 2004.04001-20.0500>20N/AN/A
November 2004.03801-20.0500>20N/AN/A
December 2004.03801-20.0500>20N/AN/A
January 2005.04101-20.0475>20N/AN/A
February 2005.04001-20.0475>20N/AN/A
March 2005.03801-20.0475>20N/AN/A
April 2005.03801-20.0475>20N/AN/A
May 2005.03901-20.0475>20N/AN/A
June 2005.03701-20.0475>20N/AN/A
July 2005.03601-20.0475>20N/AN/A
August 2005.03401-20.0475>20N/AN/A
September 2005.03601-20.0475>20N/AN/A
October 2005.03501-20.0475>20N/AN/A
November 2005.03701-20.0475>20N/AN/A
December 2005.04001-20.0475>20N/AN/A
January 2006.05701-20.0475>20N/AN/A
February 2006.05601-20.0475>20N/AN/A
March 2006.05701-20.0475>20N/AN/A
April 2006.05601-20.0475>20N/AN/A
May 2006.05901-20.0475>20N/AN/A
June 2006.06201-20.0475>20N/AN/A
July 2006.06301-20.0475>20N/AN/A
August 2006.06401-20.0475>20N/AN/A
September 2006.06201-20.0475>20N/AN/A
October 2006.06001-20.0475>20N/AN/A
November 2006.05701-20.0475>20N/AN/A
December 2006.05801-20.0475>20N/AN/A
January 2007.04881-20.0455>20N/AN/A
February 2007.05131-20.0480>20N/AN/A
March 2007.05221-20.0489>20N/AN/A
April 2007.04991-20.0466>20N/AN/A
May 2007.05201-20.0487>20N/AN/A
June 2007.05141-20.0481>20N/AN/A
July 2007.05331-20.0500>20N/AN/A
August 2007.05491-20.0516>20N/AN/A
September 2007.05531-20.0520>20N/AN/A
October 2007.05511-20.0518>20N/AN/A
November 2007.05461-20.0513>20N/AN/A
December 2007.05371-20.0504>20N/AN/A
January 2008.05421-20.0449>20N/AN/A
February 2008.05501-20.0457>20N/AN/A
March 2008.05541-20.0461>20N/AN/A
April 2008.05641-20.0471>20N/AN/A
May 2008.05811-20.0488>20N/AN/A
June 2008.05681-20.0475>20N/AN/A
July 2008.05951-20.050220N/AN/A
August 2008.06051-20.0512>20N/AN/A
September 2008.06241-20.0531>20N/AN/A
October 2008.06181-20.0525>20N/AN/A
November 2008.07091-20.0616>20N/AN/A
December 2008.07921-20.0699>20N/AN/A
January 20090.06021-200.0548>20N/AN/A
February 20090.06021-200.0548>20N/AN/A
March 20090.06021-200.0548>20N/AN/A
April-June 20090.05501-200.0502>20N/AN/A
July-September 20090.05311-200.0504>20N/AN/A
October-December 20090.05301-200.0501>20N/AN/A
January—March 20100.04891-200.0463>20N/AN/A
April-June 20100.04631-200.0451>20N/AN/A
July-September 20100.04931-200.0466>20N/AN/A
October-December 20100.04481-250.0451>25N/AN/A
January-March 20110.04071-250.0393>25N/AN/A
April-June 20110.03961-200.0432>20N/AN/A
July-September 20110.04221-200.0434>20N/AN/A
October-December 20110.04091-200.0430>20N/AN/A
January-March 20120.03741-200.0370>20N/AN/A
April-June 20120.03111-200.0336>20N/AN/A
July-September 20120.02951-200.0366>20N/AN/A
October—December 20120.03071-200.0300>20N/AN/A
January-March 20130.02671-200.0301>20N/AN/A
April-June 20130.02501-200.0320>20N/AN/A
July-September 20130.02601-200.0343>20N/AN/A
October-December 20130.03001-200.0331>20N/AN/A
January-March 20140.03351-200.0350>20N/AN/A
April—June 20140.03471-200.0364>20N/AN/A
July-September 20140.03431-200.0366>20N/AN/A
October-December 20140.03101-200.0329>20N/AN/A
January-March 20150.02891-200.0312>20N/AN/A
April-June 20150.02711-200.0278>20N/AN/A
July-September 20150.02321-200.0237>20N/AN/A
October-December 20150.02461-200.0298>20N/AN/A
January-March 20160.02821-200.0295>20N/AN/A
January-March 20170.01871-200.0237>20N/AN/A
April-June 20160.02771-200.0286>20N/AN/A
July-September 20160.02501-200.0285>20N/AN/A
October-December 20160.01981-200.0267>20N/AN/A
January-March 20170.01871-200.0237>20N/AN/A
April-June 20170.02151-200.0260>20N/AN/A
July-September 20170.02441-200.0274>20N/AN/A
October-December 20170.02341-200.0263>20N/AN/A
January-March 20180.02391-200.0260>20N/AN/A
April-June 20180.02271-200.0259>20N/AN/A
July-September 20180.02531-250.0264>25N/AN/A
October-December 20180.02841-200.0276>20N/AN/A
January-March 20190.03091-200.0284>20N/AN/A
April-June 20190.03071-200.0305>20N/AN/A
July-September 20190.02921-250.0307>25N/AN/A
October-December 20190.02531-250.0253>25N/AN/A
January-March 20200.02121-250.0226>25N/AN/A
April-June 20200.02111-200.0192>20N/AN/A
July-September 20200.01981-200.0157>20N/AN/A

[61 FR 34059, July 1, 1996]

Editorial Note: For Federal Register citations affecting part 4044, appendix B, see the List of CFR Sections Affected, which appears in the Finding Aids section of the printed volume and at www.govinfo.gov.

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Appendix C to Part 4044—Loading Assumptions

If the total value of the plan's benefit liabilities (as defined in 29 U.S.C. §1301(a)(16)), exclusive of the loading charge, is— The loading charge equals—
greater than but less than or equal to
$0$200,0005% of the total value of the plan's benefits, plus $200 for each plan participant.
$200,000$10,000, plus a percentage of the excess of the total value over $200,000, plus $200 for each plan participant; the percentage is equal to 1% + [(P%−7.50%)/10], where P% is the initial rate, expressed as a percentage, set forth in appendix B of this part for the valuation of benefits.

[61 FR 34059, July 1, 1996, as amended at 65 FR 14753, Mar. 17, 2000]

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Appendix D to Part 4044—Tables Used To Determine Expected Retirement Age

Table I-20—Selection of Retirement Rate Category

[For valuation dates in 20201]

If participant reaches URA in year—Participant's retirement rate category is—
Low2 if monthly benefit at URA is less than—Medium3 if monthly benefit at URA is—High4 if monthly benefit at URA
is greater than—
From—To—
20216726722,8392,839
20226886882,9052,905
20237047042,9712,971
20247207203,0403,040
20257367363,1103,110
20267537533,1813,181
20277717713,2543,254
20287887883,3293,329
20298068063,4063,406
2030 or later8258253,4843,484

1Applicable tables for valuation dates before 2020 are available on PBGC's website (www.pbgc.gov).

2Table II-A.

3Table II-B.

4Table II-C.

Table II-A—Expected Retirement Ages for Individuals in the Low Category

Participant's earliest retirement age at valuation date.Unreduced retirement age
60 61 62 63 64 65 66 67 68 69 70
425353535454545454545454
435354545455555555555555
445454555555555556565656
455455555656565656565656
465555565656575757575757
475656565757575757575757
485657575758585858585858
495657585858585959595959
505757585859595959595959
515758585959606060606060
525858595960606060606060
535859596060616161616161
545859606061616161616161
555959606161616262626262
565960606161626262626262
575960616162626262626262
585960616162626363636363
595960616262636363636363
606060616262636363636363
6161616263636363646464
62626263636364646464
636363646465656565
6464646565656565
65656565656565
666666666666
6767676767
68686868
696969
7070

Table II-B—Expected Retirement Ages for Individuals in the Medium Category

Participant's earliest retirement age at valuation dateUnreduced retirement age
6061626364656667686970
424949494949494949494949
435050505050505050505050
445051515151515151515151
455151525252525252525252
465252525353535353535353
475353535353545454545454
485454545454545454545454
495455555555555555555555
505555565656565656565656
515656565757575757575757
525657575757585858585858
535757585858585858585858
545758585959595959595959
555858595959606060606060
565859596060606060606060
575959606061616161616161
585960606161616161616161
595960616162626262626262
606060616262626262626262
6161616262636363636363
62626262636363636363
636363646464646464
6464646464646464
65656565656565
666666666666
6767676767
68686868
696969
7070

Table II-C—Expected Retirement Ages for Individuals in the High Category

Participant's earliest retirement age at valuation date.Unreduced retirement age
606162 6364656667686970
424646464646474747474747
434747474747474747474747
444848484848484848484848
454949494949494949494949
465050505050505050505050
475151515151515151515151
485252525252525252525252
495353535353535353535353
505454545454545454545454
515455555555555555555555
525555565656565656565656
535656565757575757575757
545757575757585858585858
555758585858585858585858
565858595959595959595959
575859596060606060606060
585959606060606161616161
595960606161616161616161
606060616161626262626262
6161616262626262626262
62626262626262626262
636363636464646464
6464646464646464
65656565656565
666666666666
6767676767
68686868
696969
7070

[61 FR 34059, July 1, 1996; 61 FR 36626, July 12, 1996, as amended at 61 FR 65476, Dec. 13, 1996; 62 FR 65611, Dec. 15, 1997; 63 FR 63180, Nov. 12, 1998; 64 FR 67165, Dec. 1, 1999; 65 FR 75166, Dec. 1, 2000; 66 FR 59695, Nov. 30, 2001; 67 FR 71472, Dec. 2, 2002; 68 FR 67034, Dec. 1, 2003; 69 FR 69822, Dec. 1, 2004; 70 FR 72076, Dec. 1, 2005; 71 FR 69482, Dec. 1, 2006; 72 FR 67645, Nov. 30, 2007; 73 FR 72717, Dec. 1, 2008; 74 FR 62698, Dec. 1, 2009; 75 FR 74622, Dec. 1, 2010; 80 FR 74987, Dec. 1, 2015; 81 FR 83138, Nov. 21, 2016; 82 FR 60308, Dec. 20, 2017; 83 FR 63803, Dec. 12, 2018; 84 FR 67186, Dec. 9, 2019]

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