The first is a new maximum guaranteed pension benefit for 2006, BNA reports. The 2006 maximum monthly benefit guaranteed by PBGC that might be paid with respect to a plan participant in a single employer pension plan that terminates in 2006 is $3,971.59, beginning at age 65. This is an increase from $3,801.41 in 2005.
The increased benefit final rule also said plan administrators of certain underfunded plans are required to provide notice to plan participants and beneficiaries of the plan’s funding status and the limits of PBGC’s guarantee. Plan administrators may, subject to regulatory requirements, include this information in participant notices, the rule said.
In addition,PBGC amended its regulation on allocation of assets in single-employer plans by substituting a new table that is used to determine expected retirement ages for plan participants.
The table applies to any plan being terminated either in a distress termination or involuntarily by the agency with a valuation date falling in 2006, and is used to compute the value of early retirement benefits and the total value of benefits under the plan. The table is updated annually to reflect changes in the cost of living.
Both final rules are effective January 1, and were scheduled to be published in the Federal Register Friday. More information about the rules is here .