E6-10919. Duties of Plan Sponsor Following Mass Withdrawal

AGENCY:

Pension Benefit Guaranty Corporation.

ACTION:

Final rule; technical amendment.

SUMMARY:

This document amends part 4281 (Duties of Plan Sponsor Following Mass Withdrawal) to make technical changes to conform to amendments made to part 4044 (Allocation of Assets in Single-Employer Plans) in a final rule published in the Federal Register on December 2, 2005. That final rule updated PBGC's mortality tables used for certain valuations for single-employer plans. Part 4281, which provides rules for valuing benefits in multiemployer plans following mass withdrawal, refers to the mortality tables in part 4044. Technical amendments are needed to conform the references in part 4281 to the changes in part 4044.

FOR FURTHER INFORMATION CONTACT:

John H. Hanley, Director, or James L. Beller, Jr., Attorney, Legislative and Regulatory Department, PBGC, 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.)

DATES:

Effective July 12, 2006.

SUPPLEMENTARY INFORMATION:

On December 2, 2005, at 70 FR 72205, PBGC published a final rule modifying part 4044 of its regulations (Allocation of Assets in Single Employer Plans) to update the mortality tables in Appendix A. Part 4281 (Duties of Plan Sponsor Following Mass Withdrawal) refers to those mortality tables. Because conforming changes to those references in part 4281 were inadvertently omitted, those references are no longer accurate. However, the correct references are obvious.

The mortality assumptions used for valuations under part 4281 mirror the assumptions in part 4044. The mortality assumptions in the two parts were updated at the same time in a final rule published in 1993. The preamble to the associated proposed rule stated: “The multiemployer regulation will be simultaneously amended so that the same mortality, loading, and interest assumptions will be employed to determine the values of benefits under multiemployer plans after a mass withdrawal.” 58 FR at 5132 (January 19, 1993). Thus, it is clear there was no intent to change this correlation when the mortality tables in part 4044 were updated in 2005. It is necessary to use the updated mortality tables under part 4281 in order to avoid inappropriate benefit valuations under that part.

Because this rule conforms part 4281 in a way that was obviously intended when part 4044 was amended by the final rule published in the Federal Register on December 2, 2005, at 70 FR 72206, PBGC finds good cause to issue this technical amendment without prior proposal and opportunity for public comment and without a 30-day delayed effective date.

List of Subjects in 29 CFR Part 4281

• Employee benefit plans
• Pensions

For the reasons set forth above, PBGC amends part 4281 of 29 CFR chapter XL as follows:

PART 4281—DUTIES OF PLAN SPONSOR FOLLOWING MASS WITHDRAWAL

1. The authority citation for part 4281 continues to read as follows:

Authority: 29 U.S.C. 1302(b)(3), 1341a, 1399(c)(1)(D), and 1441.

2. Amend § 4281.14 by revising paragraphs (c)(1), (c)(2), (d)(1), (d)(2), and (e) to read as follows:

§ 4281.14

Mortality assumptions.

* * * * *

(c) Mortality rates for healthy lives. * * *

(1) For male participants, the rates in Table 1 of Appendix A to part 4044 of this chapter 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 part 4044 of this chapter; and

(2) For female participants, the rates in Table 3 of Appendix A to part 4044 of this chapter 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 part 4044 of this chapter.

(d) Mortality rates for disabled lives (other than Social Security disability). * * *

(1) For male participants, the lesser of—

(i) The rate determined from Table 1 of Appendix A to part 4044 of this chapter 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 part 4044 of this chapter and setting the resulting table forward three years, or

(ii) The rate in Table 5 of Appendix A to part 4044 of this chapter.

(2) For female participants, the lesser of—

(i) The rate determined from Table 3 of Appendix A to part 4044 of this chapter 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 part 4044 of this chapter and setting the resulting table forward three years, or

(ii) The rate in Table 6 of Appendix A to part 4044 of this chapter.

(e) Mortality rates for disabled lives (Social Security disability). The mortality rates applicable to annuities in pay status on the valuation date that are being received as disability benefits and for which either eligibility for, or receipt of, Social Security disability benefits is a prerequisite, are—

(1) For male participants, the rates in Table 5 of Appendix A to part 4044 of this chapter; and

(2) For female participants, the rates in Table 6 of Appendix A to part 4044 of this chapter.

Issued in Washington, DC, this 6th day of July, 2006.

Vincent K. Snowbarger,

Acting Executive Director, Pension Benefit Guaranty Corporation.