Brief Case
Pension Resource

29 C.F.R. § 4022.7

Benefits payable in a lump sum.
CFR 2001 annual edition (revised as of 2001-07-01) · superseded Jul 1, 2002 · last amended by 65 FR 14752
PrintCompare datesAsk AI about this sectionOfficial source ↗
Back to current
Historical text in effect Jul 1, 2000 through Jun 30, 2002. View current · Compare with current
(a) Alternative benefit. If a benefit that is guaranteed under this part is payable in a single installment or substantially so under the terms of the plan, or an option elected under the plan by the participant, the benefit will not be guaranteed or paid as such, but the PBGC will guarantee the alternative benefit, if any, in the plan which provides for the payment of equal periodic installments for the life of the recipient. If the plan provides more than one such annuity, the recipient may within 30 days after notification of the proposed termination of the plan elect to receive one of those annuities. If the plan does not provide such an annuity, the PBGC will guarantee an actuarially equivalent life annuity.
(b)
(1) Payment in lump sum. Notwithstanding paragraph (a) of this section:
(i) In general. If the lump sum value of a benefit payable by the PBGC is $5,000 or less and the benefit is not yet in pay status, the benefit may be paid in a lump sum. In determining whether the lump sum value of a benefit is $5,000 or less, the value of any amounts returned under paragraph (b)(2) of this section is disregarded. If the PBGC determines a title IV benefit before it determines the benefit payable under section 4022(c) of ERISA, the $5,000 threshold shall apply separately to the title IV benefit. The section 4022(c) benefit shall be paid in annuity form if the title IV benefit is paid in annuity form, and otherwise shall be separately subject to the $5,000 threshold.
(ii) Annuity option. If the PBGC would otherwise make a lump sum payment in accordance with paragraph (b)(1)(i) of this section and the monthly benefit is equal to or greater than $25 (at normal retirement age and in the normal form for an unmarried participant), the PBGC shall provide the participant (or the beneficiary of a participant who is deceased as of the termination date) the option to receive the benefit in the form of an annuity.
(iii) Election of QPSA lump sum. If the lump sum value of a qualified preretirement survivor annuity is $5,000 or less, the benefit is not yet in pay status, and the participant dies after the termination date, the benefit may be paid in a lump sum if so elected by the surviving spouse.
(iv) Certain and continuous payments to estates. The PBGC may pay any benefits payable to an estate (e.g., in the case of benefits under a certain and continuous annuity where the designated beneficiary predeceases the participant) in a lump sum without regard to the threshold in paragraph (b)(1)(i) of this section if so elected by the estate. The payments shall be discounted using the immediate interest rate that would be applicable to the plan under § 4044.52(b) if the termination date had been the date of death (or, if later, July 16, 1998).
(2) Return of employee contributions—(i) General. Notwithstanding any other provision of this part, the PBGC may pay in a single installment (or a series of installments) instead of as an annuity, the value of the portion of an individual's basic-type benefit derived from mandatory employee contributions, if:
(A) The individual elects payment in a single installment (or a series of installments) before the sixty-first (61st) day after the date he or she receives notice that such an election is available; and
(B) Payment in a single installment (or a series of installments) is consistent with the plan's provisions. For purposes of this part, the portion of an individual's basic-type benefit derived from mandatory employee contributions is determined under § 4044.12 (priority category 2 benefits) of this chapter, and the value of that portion is computed under the applicable rules contained in part 4044, subpart B, of this chapter.
(ii) Set-off for distributions after termination. The amount to be returned under paragraph (b)(2)(i) of this section is reduced by the set-off amount. The set-off amount is the amount by which distributions made to the individual after the termination date exceed the amount that would have been distributed, exclusive of mandatory employee contributions, if the individual had withdrawn the mandatory employee contributions on the termination date.

Example:

Participant A is receiving a benefit of $600 per month when the plan terminates, $200 of which is derived from mandatory employee contributions. If the participant had withdrawn his contributions on the termination date, his benefit would have been reduced to $400 per month. The participant receives two monthly payments after the termination date. The set-off amount is $400. (The $600 actual payment minus the $400 the participant would have received if he had withdrawn his contributions multiplied by the two months for which he received the extra payment.)

(c) Death benefits
(1) General. Notwithstanding paragraph (a) of this section, a benefit that would otherwise be guaranteed under the provisions of this subpart, except for the fact that it is payable solely in a single installment (or substantially so) upon the death of a participant, shall be paid by the PBGC as an annuity that has the same value as the single installment. The PBGC will in each case determine the amount and duration of the annuity based on all the facts and circumstances.
(2) Exception. Upon the death of a participant the PBGC may pay in a single installment (or a series of installments) that portion of the participant's accumulated mandatory employee contributions that is payable under the plan in a single installment (or a series of installments) upon the participant's death.
(d) Determination of lump sum amount. For purposes of paragraph (b)(1)(i) through (iii) of this section, the lump sum value of a benefit shall be calculated by valuing the monthly annuity benefits payable in the form determined under § 4044.51(a) of this chapter and commencing at the time determined under § 4044.51(b) of this chapter. The actuarial assumptions used shall be those described in § 4044.52, except that—
(1) Loading for expenses. There shall be no adjustment to reflect the loading for expenses;
(2) Mortality rates and interest assumptions. The mortality rates in appendix A to this part and the interest assumptions in appendix B to this part shall apply; and
(3) Date for determining lump sum value. The date as of which a lump sum value is calculated is the termination date, except that in the case of a subsequent insufficiency it is the date described in section 4062(b)(1)(B) of ERISA.
(e) Publication of lump sum rates. The PBGC will provide two sets of lump sum interest rates as follows—
(1) In appendix B to this part, the lump sum interest rates for PBGC payments, as provided under paragraph (d)(2) of this section; and
(2) In appendix C to this part, the lump sum interest rates for private-sector payments.
Source credit, amendments & notes

[61 FR 34028, July 1, 1996, as amended at 63 FR 38306, July 16, 1998; 65 FR 14752, 14755, Mar. 17, 2000]

29 C.F.R. § 4022.7 — Benefits payable in a lump sum. · CFR 2001 annual edition (revised as of 2001-07-01) · https://pensionresource.website/EAMain?content=EAMain.Law&id=cfr29-4022.7&asof=2000-07-01 · printed Oct 16, 2026
On this page
  • (a) Alternative benefit.
  • (b) (b)
  • (c) Death benefits
  • (d) Determination of lump sum amount.
  • (e) Publication of lump sum rates.
Implements
ERISA § 4022 (29 U.S.C. § 1322) Single-employer plan benefits guaranteed
Cited by (code & regs)
Glossary
QPSA
Qualified preretirement survivor annuity.
Guidance addressing this section
PBGC
Final Rules
Proposed Rules
Also cited in 7 other documents
PBGC
Final Rules
  • 88 FR 76660 Nov 7, 2023 — Technical Amendments: Special Financial Assistance Withdrawal Liability Condition; SECURE 2.0 Act; and Other Updates
  • 79 FR 70090 Nov 25, 2014 — Title IV Treatment of Rollovers From Defined Contribution Plans to Defined Benefit Plans (b)(1)(i)(b)(2)
Proposed Rules
  • 76 FR 67105Proposed Oct 31, 2011 — Cash Balance Plans; Benefit Determinations and Plan Valuations for Statutory Hybrid Plans; Pension Protection Act of 2006 Comments due Dec 30, 2011 (b)(d)
  • 76 FR 13304Proposed Mar 11, 2011 — Benefits Payable in Terminated Single-Employer Plans; Limitations on Guaranteed Benefits Comments due May 10, 2011
IRS / Treasury
Treasury Decisions
  • T.D. 9601 Mar 4, 2013 — Final regulations under section 411(d)(6) of the Code provide guidance under the anti-cutback rules, which generally prohibit plan amendments eliminating or re…
Final Rules
  • 77 FR 66915 Nov 8, 2012 — Amendment of Prohibited Payment Option Under Single-Employer Defined Benefit Plan of Plan Sponsor in Bankruptcy
Proposed Rules
  • 77 FR 37349Proposed Jun 21, 2012 — Amendment of Prohibited Payment Option Under Single-Employer Defined Benefit Plan of Plan Sponsor in Bankruptcy Comments due Aug 20, 2012

No court rulings in the library cite this provision yet.

No private letter rulings in the library cite this provision yet.

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.

EffectiveThroughSourceAmended by
Jul 1, 1997Jun 30, 1999CFR 1998 annual edition (revised as of 1998-07-01) run 127View
Jul 1, 1999Jun 30, 2000CFR 1999 annual edition (revised as of 1999-07-01) run 12763 FR 38306, July 16, 1998View · Redline (sign in)
Jul 1, 2000Jun 30, 2002CFR 2001 annual edition (revised as of 2001-07-01) run 12765 FR 14752View · Redline (sign in)
Jul 1, 2002Jun 30, 2006CFR 2005 annual edition (revised as of 2005-07-01) run 12767 FR 16954, Apr. 8, 2002View · Redline (sign in)
Jul 1, 2006Jun 30, 2015CFR 2014 annual edition (revised as of 2014-07-01) run 12767 FR 16954, Apr. 8, 2002View · Redline (sign in)
Jul 1, 2015Dec 31, 2016CFR 2016 annual edition (revised as of 2016-07-01) run 12779 FR 70094, Nov. 25, 2014View · Redline (sign in)
Jan 1, 2017Sep 8, 2020eCFR amendment effective 2017-01-01 run 779 FR 70094, Nov. 25, 2014View · Redline (sign in)
Sep 9, 2020Dec 31, 2020eCFR amendment effective 2020-09-09 run 779 FR 70094, Nov. 25, 2014View · Redline (sign in)
Jan 1, 2021Jul 10, 2023eCFR editorial change effective 2021-01-01 run 785 FR 55591, Sept. 9, 2020View · Redline (sign in)
Jul 11, 2023Aug 9, 2023eCFR amendment effective 2023-07-11 run 785 FR 55591, Sept. 9, 2020View · Redline (sign in)
Aug 10, 2023Nov 6, 2023eCFR amendment effective 2023-12-07 run 288 FR 44051, July 11, 2023View · Redline (sign in)
Nov 7, 2023Dec 6, 2023eCFR amendment effective 2023-11-07 run 788 FR 44051, July 11, 2023View · Redline (sign in)
Dec 7, 2023currenteCFR amendment effective 2023-12-07 run 788 FR 44051, July 11, 2023View · Redline (sign in)
Provision-level history (blame)