PBGC Amends Rule Used in Computing Value of Early Retirement Benefits
The Pension Benefit Guaranty Corporation (PBGC) on Nov. 21 issued a final rule
amending its valuation regulation by substituting a new table for selecting a retirement rate category.
This rule amends the PBGC regulation on allocation of assets in single-employer plans by substituting a new table for determining expected retirement ages for participants in pension plans that are distressed or involuntary terminated and have valuation dates in 2017. The table is used to compute the value of early retirement benefits and, thus, the total value of benefits under a plan.
Specifically, the rule amends appendix D of the regulation on allocation of assets in
single-employer plans to replace Table I–16 with Table I–17 in order to provide an updated correlation, appropriate for calendar year 2017, between the amount of a participant’s
benefit and the probability that the participant will elect early retirement. Table I–17 will be used to value benefits in plans with valuation dates during calendar year 2017.
The new rule is effective Jan. 1, 2017.