[Code of Federal Regulations]
[Title 29, Volume 9]
[Revised as of July 1, 2005]
From the U.S. Government Printing Office via GPO Access
[CITE: 29CFR4022.24]

[Page 796-797]
 
                             TITLE 29--LABOR
 
            CHAPTER XL--PENSION BENEFIT GUARANTY CORPORATION
 
PART 4022_BENEFITS PAYABLE IN TERMINATED SINGLE-EMPLOYER PLANS--Table 
of Contents
 
              Subpart B_Limitations on Guaranteed Benefits
 
Sec. 4022.24  Benefit increases.

    (a) Scope. This section applies:
    (1) To all benefit increases, as defined in Sec. 4022.2, payable 
with respect to a participant other than a substantial owner, which have 
been in effect for less than five years preceding the termination date; 
and
    (2) To all benefit increases payable with respect to a substantial 
owner, which have been in effect for less than 30 years preceding the 
termination date.
    (b) General rule. Benefit increases described in paragraph (a) of 
this section shall be guaranteed only to the extent provided in Sec. 
4022.25 with respect to a participant other than a substantial owner and 
in Sec. 4022.26 with respect to a participant who is a substantial 
owner.
    (c) Computation of guaranteeable benefit increases. Except as 
provided in paragraph (d) of this section pertaining to multiple benefit 
increases, the amount of a guaranteeable benefit increase shall be the 
amount, if any, by which the monthly benefit calculated pursuant to 
paragraph (c)(1) of this section (the monthly benefit provided under the 
terms of the plan as of the termination date, as limited by Sec. 
4022.22) exceeds the monthly benefit

[[Page 797]]

calculated pursuant to paragraph (c)(4) of this section (the monthly 
benefit which would have been payable on the termination date if the 
benefit provided subsequent to the increase were equivalent, as of the 
date of the increase, to the benefit provided prior to the increase).
    (1) Determine the amount of the monthly benefit payable on the 
termination date (or, in the case of a deferred benefit, the monthly 
benefit which will become payable thereafter) under the terms of the 
plan subsequent to the increase, using service credited to the 
participant as of the termination date, that is guaranteeable pursuant 
to Sec. 4022.22;
    (2) Determine, as of the date of the benefit increase, in accordance 
with the provisions of Sec. 4022.23, the factors which would be used to 
calculate the monthly maximum benefit guaranteeable (i) under the terms 
of the plan prior to the increase and (ii) under the terms of the plan 
subsequent to the increase. However, when the benefit referred to in 
paragraph (c)(2)(ii) of this section is a joint and survivor benefit 
deferred as of the termination date and there is no beneficiary on that 
date, the factors computed in paragraph (c)(2)(ii) of this section shall 
be determined as if the benefit were payable only to the participant. 
Each set of factors determined under this paragraph shall be stated in 
the manner set forth in Sec. 4022.23(b)(1);
    (3) Multiply the monthly benefit which would have been payable (or, 
in the case of a deferred benefit, would have become payable) under the 
terms of the plan prior to the increase based on service credited to the 
participant as of the termination date by a fraction, the numerator of 
which is the product of the factors computed pursuant to paragraph 
(c)(2)(ii) of this section and the denominator of which is the product 
of the factors computed pursuant to paragraph (c)(2)(i) of this section.
    (4) Calculate the amount of the monthly benefit which would be 
payable on the termination date if the monthly benefit computed in 
paragraph (c)(3) of this section had been payable commencing on the date 
of the benefit increase (or, in the case of a deferred benefit, would 
have become payable thereafter). In the case of a benefit which does not 
become payable until subsequent to the termination date, the amount of 
the monthly benefit determined pursuant to this paragraph is the same as 
the amount of the monthly benefit calculated pursuant to paragraph 
(c)(3) of this section.
    (d) Multiple benefit increases. (1) Where there has been more than 
one benefit increase described in paragraph (a) of this section, the 
amounts of guaranteeable benefit increases shall be calculated beginning 
with the earliest increase, and each such amount (except for the amount 
resulting from the final benefit increase) shall be multiplied by a 
fraction, the numerator of which is the product of the factors, stated 
in the manner set forth in Sec. 4022.23(b)(1), used to calculate the 
monthly maximum guaranteeable benefit under Sec. 4022.22 and the 
denominator of which is the product of the factors used in the 
calculation under paragraph (c)(2)(i) of this section.
    (2) Each benefit increase shall be treated separately for the 
purposes of Sec. 4022.25, except as otherwise provided in paragraph (d) 
of that section, and for the purposes of Sec. 4022.26, as appropriate.
    (e) For the purposes of Sec. Sec. 4022.22 through 4022.27, a 
benefit increase is deemed to be in effect commencing on the later of 
its adoption date or its effective date.

[61 FR 34028, July 1, 1996; 61 FR 36626, July 12, 1996, as amended at 62 
FR 67728, Dec. 30, 1997]