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PBGC Amends its Valuation Rule Concerning Expected Retirement Age

Practice Management

The Pension Benefit Guaranty Corporation (PBGC) on Dec. 12 issued a final rule amending its 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 by the PBGC with valuation dates falling in 2019.

The PBGC says this table is needed for computing the value of early retirement benefits and, thus, the total value of benefits under a plan.

The PBGC is not seeking public comment on the rule. To do so would be “impracticable and contrary to the public interest,” it says, since administrators of plans that have a valuation date in 2019 need the updated table as soon as possible.

Effective Date

The new final rule is effective Jan. 1, 2019. “Good cause exists for making the table set forth in this amendment effective less than 30 days after publication to allow as much time as possible to estimate the value of plan benefits with the proper table for plans with valuation dates in early 2019,” the PBGC says.