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News & Policy

PBGC Announces Maximum Insurance Benefit for 2011

FOR IMMEDIATE RELEASE
October 19, 2010

WASHINGTON- The Pension Benefit Guaranty Corporation (PBGC) today announced that the maximum insurance benefit for participants in underfunded pension plans terminating in 2011 will be $54,000 per year for those who retire at age 65. The amount is higher for those who retire later and lower for those who retire earlier or elect survivor benefits (see chart). The PBGC maximum insurance benefit is indexed to a contribution and benefit base in Social Security law. Because that amount does not increase for 2011, the PBGC maximum insurance benefit is unchanged from 2010.

If a pension plan terminates in 2011 but a participant does not begin collecting benefits until a future year, the 2011 maximum insurance limits still apply. For plans that terminate while the plan sponsor is in bankruptcy proceedings, the Pension Protection Act of 2006 provides that the maximum benefit payable is determined by the legal limits in force on the date the plan sponsor filed for bankruptcy and not on the date of plan termination.

The maximum insurance benefit is set by law. Two additional legal limits on PBGC's insurance coverage can also affect participants' benefits. The first prohibits the PBGC from guaranteeing benefits that exceed the amount payable at the plan's normal retirement age. The second limits PBGC's guarantee of benefit increases made within the five years prior to plan termination, or the date the sponsor filed for bankruptcy, if the sponsor is in bankruptcy when the plan terminates. For more information, see PBGC's fact sheet "Pension Guarantees" (http://www.pbgc.gov/res/factsheets/page/guar-facts.html).

The overwhelming majority of the participants in plans taken over by the agency face no reduction in benefits due to the legal limits on coverage, PBGC research shows. The largest reductions occur in cases where participants earn pensions that 1) significantly exceed the maximum insurance benefit, or 2) provide generous early retirement subsidies.

Under the PBGC's single-employer insurance program, retirees sometimes can receive more than the maximum guaranteed benefit. In general, three conditions must apply: 1) the participant earned a benefit in excess of the maximum guaranteed amount; 2) the participant retired or was eligible to retire at least three years prior to plan termination; and 3) the plan had sufficient assets to pay benefits above the guaranteed amount.

The following chart shows the 2011 annual and monthly maximum benefit guarantees for retirees from age 75 to 45. The maximum amount is lower for benefits commencing at ages below 65, reflecting the fact that younger retirees receive more monthly pension checks over a longer expected remaining lifespan. The maximum amount is higher for benefits commencing at ages above 65, reflecting the fact that older retirees receive fewer monthly pension checks over their expected remaining lifespan.

Age

Annual Maximum

Monthly Maximum

Monthly Joint and 50% Survivor Maximum*

75

$164,160.00

$13,680.00

$12,312.00

74

$149,256.00

$12,438.00

$11,194.20

73

$134,352.00

$11,196.00

$10,076.40

72

$119,448.00

$9,954.00

$8,958.60

71

$104,544.00

$8,712.00

$7,840.80

70

$89,640.00

$7,470.00

$6,723.00

69

$80,460.00

$6,705.00

$6,034.50

68

$72,360.00

$6,030.00

$5,427.00

67

$65,340.00

$5,445.00

$4,900.50

66

$59,400.00

$4,950.00

$4,455.00

65

$54,000.00

$4,500.00

$4,050.00

64

$50,220.00

$4,185.00

$3,766.50

63

$46,440.00

$3,870.00

$3,483.00

62

$42,660.00

$3,555.00

$3,199.50

61

$38,880.00

$3,240.00

$2,916.00

60

$35,100.00

$2,925.00

$2,632.50

59

$32,940.00

$2,745.00

$2,470.50

58

$30,780.00

$2,565.00

$2,308.50

57

$28,620.00

$2,385.00

$2,146.50

56

$26,460.00

$2,205.00

$1,984.50

55

$24,300.00

$2,025.00

$1,822.50

54

$23,220.00

$1,935.00

$1,741.50

53

$22,140.00

$1,845.00

$1,660.50

52

$21,060.00

$1,755.00

$1,579.50

51

$19,980.00

$1,665.00

$1,498.50

50

$18,900.00

$1,575.00

$1,417.50

49

$17,820.00

$1,485.00

$1,336.50

48

$16,740.00

$1,395.00

$1,255.50

47

$15,660.00

$1,305.00

$1,174.50

46

$14,580.00

$1,215.00

$1,093.50

45

$13,500.00

$1,125.00

$1,012.50

*Both spouses the same age.

The PBGC is a federal agency that guarantees payment of private pension benefits when companies and plans fail. It protects some 44 million Americans in over 29,000 private defined benefit pension plans. PBGC pays benefits using insurance premiums and assets and other recoveries from plans and their sponsors; it receives no taxpayer funds.

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PBGC No. 11-04