PLANSPONSOR - November - December 2023 - 8

RULES & REGULATIONS
The maximum guarantee limits-
the amount the PBGC will pay
participants in the event a pension
plan fails-will increase by 5.3% for
any single-employer plan that fails
in 2024.
his co-sponsorship of 2022's Protect
Farmers From the SEC Act, which would
prevent
the Securities
and Exchange
Commission from requiring greenhouse
gas emission disclosures in the agricultural
industry.
PBGC Announces 2024
Premiums, Guarantee Levels
The Pension Benefit Guaranty
Corporation announced its updated guarantee
limits and premium rates for 2024.
The maximum guarantee limits-the
amount the PBGC will pay participants if
a pension plan fails-will increase by 5.3%
for any single-employer plan that fails in
2024. The exact maximums vary based on
participants' age and choice of annuity.
The PBGC provided a table outlining
what would be the monthly guaranteed
payments next year for each age and
annuity
choice-straight
life
annuities
or 50% joint and survivor annuities.
Younger participants have lower monthly
guarantees, to account for their longer
remaining life spans. Multiemployer
plans are not indexed to inflation for the
purpose of guarantees.
The PBGC also updated its premium
rates-the insurance payments that
pensions make to the PBGC-in midOctober.
Section 349 of the SECURE
[for Setting Every Community Up for
Retirement Enhancement] 2.0 Act of 2022
froze the variable rate premium at 5.2% of
unfunded liabilities by de-linking it from
inflation for single-employer plans.
Other determinants in rate-setting
are still indexed to inflation, though. The
8 PLANSPONSOR.COM November - December 2023
maximum per-participant cap for the
variable rate-the highest the 5.2% can
reach-is $686 for next year, up from
$652 this year. The flat-rate fee for singleemployer
plans will increase to $101 from
$96. Multiemployer plans pay only a perparticipant
premium, which will increase
to $37 next year from $35.
Arbitration Case Appeals
Won't Go Before SCOTUS
The U.S. Supreme Court has declined to
hear two cases concerning the enforceability
of mandatory arbitration and class
action waivers in plan documents. The
decision effectively denies appeals of decisions
made by judges in the 3rd and 10th
Circuit Courts of Appeal, both of which
ruled that mandatory arbitration and class
action waiver clauses in plan documents
are unenforceable under the Employee
Retirement Income Security Act. The
Supreme Court declined to hear the appeal
of the 10th Circuit decision on October 10
and the 3rd Circuit decision on October 16.
Both cases alleged that private equity
in employee stock ownership plans
was improperly valued at the expense
of the participants. In Robert Harrison
v. Envision Management Holdings, the
10th Circuit ruled for Harrison, while in
Marlow Henry v. Wilmington Trust, the 3rd
Circuit ruled for Henry.
In both circuit court outcomes, the
defendants' moves to force individual
arbitration and prevent a class action
remedy were denied.
COLA Announced for 2024
The cost-of-living adjustment for 2024
will be 3.2% for more than 71 million
Americans who receive Social Security, the
Social Security Administration announced
on October 12.
Retirees' monthly payments will
therefore rise by an average of about
$59 to an estimated average of $1,907,
starting in January 2024. Increased
payments to approximately 7.5 million
Supplemental Security Income recipients
will begin this December 29.
The adjustment was significantly
lower this year than in recent years due to
reduced inflation. Recipients had received
increases of 8.7% for 2023 and 5.9% for
2022. The average adjustment over the
past 20 years was 2.6%. The maximum
amount of earnings subject to the Social
Security tax will also increase, to $168,600.
The COLA is based on inflation data
from the year's third quarter, published
by the Bureau of Labor Statistics in the
Consumer Price Index for All Urban
Consumers.
Besides the COLA, the earnings limit
for workers younger than full retirement
age will increase to $22,320, and the earnings
limit for people reaching their full
retirement age next year will increase to
$59,520. The SSA deducts $1 from benefits
for each $3 earned over $59,520 until
the month the worker reaches full retirement
age. There is no limit on earnings
for workers who are full retirement age or
older for the entire year. -PS
For in-depth coverage of these topics and more, go to PLANSPONSOR.com/compliance.
http://www.PLANSPONSOR.com/compliance http://www.PLANSPONSOR.COM
PLANSPONSOR - November - December 2023

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