PBGC Announces Maximum Guarantee for the Year 2003
FOR IMMEDIATE RELEASE
November 08, 2002
The Pension Benefit Guaranty Corporation (PBGC) today announced that the maximum benefit it will guarantee for retirees in underfunded single-employer defined benefit plans that terminate in the year 2003 will be $3,664.77 per month, or $43,977.24 per year.
The Employee Retirement Income Security Act of 1974 (ERISA) mandates that the maximum guaranteed amount be adjusted annually based on changes in the Social Security contribution and benefit base. The maximum guarantee applies to workers who retire at age 65. Maximum guarantees are reduced for those who retire at younger ages or who elect survivor benefits. In some instances, where a pension plan has adequate resources or PBGC recovers sufficient amounts, a participant may receive benefits in excess of the maximum guarantee. In other instances a participant's benefit may be reduced even though it does not exceed the maximum guarantee, for example, because of limits on PBGC coverage of early retirement supplements and recent benefit improvements.
About 624,000 workers and retirees in nearly 3,000 pension plans rely on PBGC for their retirement income.
The maximum monthly guaranteed amounts for plans terminating each year for the past 10 years are:
|Year of Plan Termination||Maximum Monthly Guarantee||Maximum Annual Guarantee|
PBGC will publish the 2003 maximum guarantee in the December 2, 2002 Federal Register.
PBGC is a federal corporation created under ERISA. It currently guarantees payment of basic pension benefits earned by about 44 million American workers and retirees participating in over 35,000 private-sector defined benefit pension plans. The agency receives no funds from general tax revenues. Operations are financed largely by insurance premiums paid by companies that sponsor pension plans and investment returns.
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PBGC No. 03-03