PBGC Ups Maximum Insurance Benefit
The Pension Benefit Guaranty Corporation (PBGC) has increased the yearly maximum guaranteed benefit for a 65-year-old retiree to almost $57,500 from $56,000.
PBGC protects the pension benefits of more than 40 million of America’s workers and retirees in nearly 26,000 private sector pension plans, and is directly responsible for paying the benefits of more than 1.5 million people in failed pension plans. The agency finances its operations by insurance premiums and with assets and recoveries from failed plans, with no taxpayer dollars involved.
Most retirees who get their pension from PBGC receive the full amount of their promised benefit. The PBGC maximum guarantee is based on a formula prescribed by federal law. Yearly amounts are higher for people older than age 65, and lower for those who retire earlier or choose survivor benefits.
If a pension ends in 2013, but a retiree does not begin collecting benefits until a future year, the 2013 rates still apply. For plans that terminate as a result of bankruptcy, the maximum yearly rates are guided by the limits in effect on the day the bankruptcy started, not the day the plan ended.
Beginning in 2013, the maximum yearly guarantee for a 65-year-old retiree is $57,477.24. The increase is not retroactive.
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