On December 7, 2022, the Pension Benefit Guarantee Corporation (PBGC) published a final rule amending the allocation of assets in single-employer plans. PBGC administers the pension plan termination insurance program that ERISA provides to defined benefit plans. The amended rule provides methods for valuing plan benefits when pension plans undergo distress or involuntary termination.
When PBGC involuntarily terminates an underfunded plan, the asset allocation rules determine the amount of the plan's underfunding. As a part of that allocation, early retirement benefits are valued based on the annuity starting date or the expected retirement age. These final rules update the table that identifies expected early retirement ages for 2023.
Since this update is routine, PBGC has determined that public comment is unnecessary. Defined benefit plan sponsors should be aware of the changes.