CFR > Title 29 - Labor > SUBTITLE B—Regulations Relating to Labor > CHAPTER XL—PENSION BENEFIT GUARANTY CORPORATION (parts 4000 to 4907) > SUBCHAPTER D—COVERAGE AND BENEFITS (parts 4022 to 4022B) > PART 4022—BENEFITS PAYABLE IN TERMINATED SINGLE-EMPLOYER PLANS > SUBPART B—Limitations on Guaranteed Benefits (§4022.21 to §4022.27) > 4022.22—Maximum guaranteeable benefit.

4022.22—Maximum guaranteeable benefit.

Subject to section 4022B of ERISA and part 4022B of this chapter, benefits payable with respect to a participant under a plan shall be guaranteed only to the extent that such benefits do not exceed the actuarial value of a benefit in the form of a life annuity payable in monthly installments, commencing at age 65 equal to the lesser of the amounts computed in paragraphs (a) and (b) of this section.
(a) One-twelfth of the participant's average annual gross income from his employer during either his highest-paid five consecutive calendar years in which he was an active participant under the plan, or if he was not an active participant throughout the entire such period, the lesser number of calendar years within that period in which he was an active participant under the plan.
(1) As used in this paragraph, “gross income” means “earned income” as defined in section 911(b) of the Code, determined without regard to any community property laws.
(2) For the purposes of this paragraph, if the plan is one to which more than one employer contributes, and during any calendar year the participant received gross income from more than one such contributing employer, then the amounts so received shall be aggregated in determining the participant's gross income for the calendar year.
(b) $750 multiplied by the fraction x/$13,200 where “x” is the Social Security contribution and benefit base determined under section 230 of the Social Security Act in effect at the termination date of the plan.

Code of Federal Regulations

§ 4022.22 Nt.

Code of Federal Regulations

Effective Date Note: At 76 FR 34602, June 14, 2011, § 4022.22 was revised, effective July 14, 2011. For the convenience of the user, the revised text is set forth as follows: § 4022.22 Maximum guaranteeable benefit. (a) In general. Subject to section 4022B of ERISA and part 4022B of this chapter , and except as provided in paragraph (b) of this section, benefits payable with respect to a participant under a plan shall be guaranteed only to the extent that such benefits do not exceed the actuarial value of a benefit in the form of a life annuity payable in monthly installments, commencing at age 65, equal to the lesser of— (1) One-twelfth of the participant's average annual gross income from his employer during either his highest-paid five consecutive calendar years in which he was an active participant under the plan, or if he was not an active participant throughout the entire such period, the lesser number of calendar years within that period in which he was an active participant under the plan; or (2) $750 multiplied by the fraction x/$13,200 where “x” is the Social Security contribution and benefit base determined under section 230 of the Social Security Act in effect at the termination date of the plan.
Code of Federal Regulations 973
(b) PPA 2006 bankruptcy termination. In a PPA 2006 bankruptcy termination— (1) The five-year period described in paragraph (a)(1) of this section shall not include any calendar years that end after the bankruptcy filing date. (2) “Bankruptcy filing date” is substituted for “termination date of the plan” in paragraph (a)(2) of this section. Example: A contributing sponsor files a bankruptcy petition in 2007. The sponsor's plan terminates in a distress termination with a termination date in 2008. PBGC will compute participants' maximum guaranteeable benefits based on the amount determined under paragraph (a)(2) for 2007 ($4,125.00 as a straight-life annuity starting at age 65). (c) Gross income. For purposes of paragraph (a)(1) of this section— (1) Gross income means “earned income” as defined in section 911(d)(2) of the Code, determined without regard to any community property laws. (2) If the plan is one to which more than one employer contributes, and during any calendar year the participant received gross income from more than one such contributing employer, then the amounts so received shall be aggregated in determining the participant's gross income for the calendar year.