Benefit guarantee

Because benefit increases became effective through collective bargaining agreements (not specific action by the Board of Trustees), PBGC looks to the adoption and effective dates of those agreements to apply the five-year phase-in rule.

PBGC guarantees basis plan benefits only and does not guarantee the payment of non-basic plan benefits. 

PBGC’s plan termination insurance program covers retirees in pay status.

Terminated, vested benefits are guaranteed when all conditions under the plan necessary to establish entitlement to the benefit at a specified age are satisfied even though participant has yet to attain retirement age on the date of plan termination.

Discusses how the five-year phase-in rule impacts guarantee of certain recent benefit increases and that certain early retirement supplements are not guaranteed.

Laid-off employees may accrue guaranteed benefits up to date of plan termination.

$20 minimum in the regulation is not subject to actuarial adjustment for the participant’s age at the time the benefit started.

Addresses the calculation of guaranteed benefits; PBGC measures benefits using plan factors at date of plan termination.

A profit-sharing benefit in the plan is nonforfeitable and a pension benefit because the plan states it may be paid as an annuity. Because PBGC guarantees and pays the benefit as an annuity, it won’t be paid in a lump sum if the plan is insufficient.

Employees cease accruing service credit as of date of plan termination.