29 C.F.R. § 4022.23

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Computation of maximum guaranteeable benefits.

CFR 2010 annual edition (revised as of 2010-07-01) · superseded Jul 1, 2011 · last amended by 61 FR 36626, July 12, 1996

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(a) General. Where a benefit is payable in any manner other than as a monthly benefit payable for life commencing at age 65, the maximum guaranteeable monthly amount of such benefit shall be computed by applying the applicable factor or factors set forth in paragraphs (c)-(e) of this section to the monthly amount computed under § 4022.22. In the case of a step-down life annuity, the maximum guaranteeable monthly amount of such benefit shall be computed in accordance with paragraph (f) of this section.

(b) Application of adjustment factors to monthly amount computed under § 4022.22.

(1) Each percentage increase or decrease computed under paragraphs (c), (d), and (e) of this section shall be added to or subtracted from a base of 1.00, and the resulting amounts shall be multiplied.

(2) The monthly amount computed under § 4022.22 shall be multiplied by the product computed pursuant to paragraph (b)(1) of this section in order to determine the participant's and/or beneficiary's maximum benefit guaranteeable.

(c) Annuitant's age factor. If a participant or the beneficiary of a deceased participant is entitled to and chooses to receive his benefit at an age younger than 65, the monthly amount computed under § 4022.22 shall be reduced by the following amounts for each month up to the number of whole months below age 65 that corresponds to the later of the participant's age at the termination date or his age at the time he begins to receive the benefit: For each of the 60 months immediately preceding the 65th birthday, the reduction shall be _7/12 of 1%; For each of the 60 months immediately preceding the 60th birthday, the reduction shall be _4/12 of 1%; For each of the 120 months immediately preceding the 55th birthday, the reduction shall be _2/12 of 1%; and For each succeeding 120 months period, the monthly percentage reduction shall be _1/2 of that used for the preceding 120 month period.

(d) Factor for benefit payable in a form other than as a life annuity. When a benefit is in a form other than a life annuity payable in monthly installments, the monthly amount computed under § 4022.22 shall be adjusted by the appropriate factors on a case-by-case basis by PBGC. This paragraph sets forth the adjustment factors to be used for several common benefit forms payable in monthly installments.

(1) Period certain and continuous annuity. A period certain and continuous annuity means an annuity which is payable in periodic installments for the participant's life, but for not less than a specified period of time whether or not the participant dies during that period. The monthly amount of a period certain and continuous annuity computed under § 4022.22 shall be reduced by the following amounts for each month of the period certain subsequent to the termination date:

For each month up to 60 months deduct _1/24 of 1%;

For each month beyond 60 months deduct _1/12 of 1%.

(i) A cash refund annuity means an annuity under which if the participant dies prior to the time when he has received pension payments equal to a fixed sum specified in the plan, then the balance is paid as a lump-sum death benefit. A cash refund annuity shall be treated as a benefit payable for a period certain and continuous. The period of certainty shall be computed by dividing the amount of the lump-sum refund by the monthly amount to which the participant is entitled under the terms of the plan.

(ii) An installment refund annuity means an annuity under which if the participant dies prior to the time he has received pension payments equal to a fixed sum specified in the plan, then the balance is paid as a death benefit in periodic installments equal in amount to the participant's periodic benefit. An installment refund annuity shall be treated as a benefit payable for a period certain and continuous. The period of certainty shall be computed by dividing the amount of the remaining refund by the monthly amount to which the participant is entitled under the terms of the plan.

(2) Joint and survivor annuity (contingent basis). A joint and survivor annuity (contingent basis) means an annuity which is payable in periodic installments to a participant for his life and upon his death is payable to his beneficiary for the beneficiary's life in the same or in a reduced amount. The monthly amount of a joint and survivor annuity (contingent basis) computed under § 4022.22 shall be reduced by an amount equal to 10% plus _2/10 of 1% for each percentage point in excess of 50% of the participant's benefit that will continue to be paid to the beneficiary. If the benefit payable to the beneficiary is less than 50 percent of the participant's benefit, PBGC shall provide the adjustment factors to be used.

(3) Joint and survivor annuity (joint basis). A joint and survivor annuity (joint basis) means an annuity which is payable in periodic installments to a participant and upon his death or the death of his beneficiary is payable to the survivor for the survivor's life in the same or in a reduced amount. The monthly amount of a joint and survivor annuity (joint basis) computed under § 4022.22 shall be reduced by an amount equal to _4/10 of 1% for each percentage point in excess of 50% of the participant's original benefit that will continue to be paid to the survivor. If the benefit payable to the survivor is less than 50 percent of the participant's original benefit, PBGC shall provide the adjustment factors to be used.

(e) When a benefit is payable in a form described in paragraph (d)(2) or (3) of this section, and the beneficiary's age is different from the participant's age, by 15 years or less, the monthly amount computed under § 4022.22 shall be adjusted by the following amounts: If the beneficiary is younger than the participant, deduct 1% for each year of the age difference; If the beneficiary is older than the participant, add _1/2 of 1% for each year of the age difference. In computing the difference in ages, years over 65 years of age shall not be counted. If the difference in age between the beneficiary and the participant is greater than 15 years, PBGC shall provide the adjustment factors to be used.

(f) Step-down life annuity. A step-down life annuity means an annuity payable in a certain amount for the life of the participant plus a temporary additional amount payable until the participant attains an age specified in the plan.

(1) The temporary additional amount payable under a step-down life annuity shall be converted to a life annuity payable in monthly installments by multiplying the appropriate factor based on the participant's age and the number of remaining years of the temporary additional benefit by the amount of the temporary additional benefit. The factors to be used are set forth in the table below. The amount of the monthly benefit so calculated shall be added to the level amount of the monthly benefit payable for life to determine the level-life annuity that is equivalent to the step-down life annuity.

Factors for Converting Temporary Additional Benefit Under Step-Down Life Annuity
Age of participant 1 at the later of the date the temporary additional benefit commences or the date of plan termination	Number of years temporary additional benefit is payable under the plan as of the date of plan termination 2	1	2	3	4	5	6	7	8	9
45	0.060	0.117	0.170	0.220	0.268	0.315	0.355	0.395	0.435	0.475
46	.061	.119	.173	.224	.273	.321	.362	.403	.444	.485
47	.062	.121	.176	.228	.278	.327	.369	.411	.453	.495
48	.063	.123	.179	.232	.283	.333	.376	.419	.462	.505
49	.064	.125	.182	.236	.288	.339	.383	.427	.471	.515
50	.065	.127	.185	.240	.293	.345	.390	.435	.480	.525
51	.066	.129	.188	.244	.298	.351	.397	.443	.489	.535
52	.067	.131	.191	.248	.303	.357	.404	.451	.498	.545
53	.068	.133	.194	.252	.308	.363	.411	.459	.507	.555
54	.069	.135	.197	.256	.313	.369	.418	.467	.516	.565
55	.070	.137	.200	.260	.318	.375	.425	.475	.525	.575
56	.072	.141	.206	.268	.328	.387	.439	.491	.543
57	.074	.145	.212	.276	.338	.399	.453	.507
58	.076	.149	.218	.284	.348	.411	.467
59	.078	153	.224	.292	.358	.423
60	.080	.157	.230	.300	.368
61	.082	.161	.236	.308
62	.084	.165	.242
63	.086	.169
64	.088

(2) If a participant is entitled to and chooses to receive a step-down life annuity at an age younger than 65, the monthly amount computed under § 4022.22 shall be adjusted by applying the factors set forth in paragraph (c) of this section in the manner described in paragraph (b) of this section.

(3) If the level-life monthly benefit calculated pursuant to paragraph (f)(1) of this section exceeds the monthly amount calculated pursuant to paragraph (f)(2) of this section, then the monthly maximum benefit guaranteeable shall be a step-down life annuity under which the monthly amount of the temporary additional benefit and the amount of the monthly benefit payable for life, respectively, shall bear the same ratio to the monthly amount of the temporary additional benefit and the monthly benefit payable for life provided under the plan, respectively, as the monthly benefit calculated pursuant to paragraph (f)(2) of this section bears to the monthly benefit calculated pursuant to paragraph (f)(1) of this section.

Source credit, amendments & notes

[61 FR 34028, July 1, 1996; 61 FR 36626, July 12, 1996]

29 C.F.R. § 4022.23 — Computation of maximum guaranteeable benefits. · CFR 2010 annual edition (revised as of 2010-07-01) · https://pensionresource.website/EAMain?content=EAMain.Law&id=cfr29-4022.23&asof=1995-01-04 · printed Oct 16, 2026

Implements

ERISA § 4022 (29 U.S.C. § 1322) Single-employer plan benefits guaranteed

Cited by (code & regs)

29 C.F.R. § 4022.61 Limitations on benefit payments by plan administr…
29 C.F.R. § 4022.24 Benefit increases.

Guidance addressing this section

No documents are primarily about this section.

Also cited in 4 other documents

PBGC

Final Rules

88 FR 44045 Jul 11, 2023 — Benefit Payments and Allocation of Assets
76 FR 34590 Jun 14, 2011 — Bankruptcy Filing Date Treated as Plan Termination Date for Certain Purposes; Guaranteed Benefits; Allocation of Plan Assets; Pension Protection Act of 2006 (g)

Proposed Rules

84 FR 51494Proposed Sep 30, 2019 — Benefit Payments and Allocation of Assets Comments due Nov 29, 2019 (c)

Technical Updates

PBGC Tech. Update 07-4 Aug 31, 2007 — Present Value of the Maximum PBGC Guaranteed Benefit under IRC Section 436(d)(3)(A)(ii) and ERISA Section 206(g)(3)(C)(i)(II) (c)

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Each row is a version of the text as published by the official source. Code dates are the edition/release point that first reflected the change; regulation dates are eCFR effective dates. The library checks the official sources automatically, so new versions appear here on their own; “run” opens the sync that recorded a version.

Effective	Through	Source	Amended by
Jul 1, 1997	Jun 30, 2011	CFR 2010 annual edition (revised as of 2010-07-01)	61 FR 36626, July 12, 1996	View
Jul 1, 2011	Jun 30, 2012	CFR 2011 annual edition (revised as of 2011-07-01)	61 FR 36626, July 12, 1996	View · Redline (sign in)
Jul 1, 2012	Dec 31, 2016	CFR 2016 annual edition (revised as of 2016-07-01)	76 FR 34603, June 14, 2011	View · Redline (sign in)
Jan 1, 2017	current	eCFR editorial change effective 2017-01-01 run 2	76 FR 34603, June 14, 2011	View · Redline (sign in)

Provision-level history (blame)

29 C.F.R. § 4022.23

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PBGC