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Your Guaranteed Pension: Single-Employer Plans

The Pension Benefit Guaranty Corporation (PBGC) insures certain defined benefit pension plans offered by private-sector employers. PBGC protects single-employer pension plans and multiemployer pension plans in separate insurance programs. These Frequently Asked Questions provide information on the single-employer program and how your pension may be affected by PBGC guarantees.

PBGC is a federal agency created by the Employee Retirement Income Security Act of 1974 (ERISA) to protect pension benefits in private defined benefit plans - the kind that typically pay a set monthly amount at retirement. If your pension plan is insured by PBGC, and it ends without sufficient money to pay all benefits, PBGC's insurance program will pay you the benefit provided by your pension plan up to the limits set by law.

PBGC is not funded by general tax revenues. Our funding comes from (1) insurance premiums paid by companies whose plans we protect; (2) investments; (3) assets of pension plans that we take over as trustee; and (4) recoveries in bankruptcy from the companies formerly responsible for the plans. Your insured plan remains protected even if your employer fails to pay the required premiums.

Under financially separate guarantee programs, PBGC insures single-employer and multiemployer defined benefit pension plans.

single-employer plan is a plan that is created and maintained by one company or closely-affiliated companies, such as a parent and a subsidiary.  Some single-employer plans are negotiated with a union ("collectively bargained").  Certain non-bargained plans with unrelated employers, known as multiple employer plans, are also classified as single-employer plans for the purposes of PBGC insurance coverage.

multiemployer plan is a plan that is created and maintained by two or more unrelated companies through collective bargaining. These plans may involve one or more union. Multiemployer plans often cover workers in the same or related industries. Such plans are common in sectors where workers may have jobs with different employers within the industry over time, such as the transportation, construction, and hospitality industries.

PBGC insures defined benefit plans offered by private-sector employers. Most defined benefit plans promise to pay a specified benefit; usually a monthly amount, at retirement for life. Others, including cash-balance plans, may state the promised benefit as a single account balance, which may be paid as a lump sum or as an annuity. Although PBGC insures most defined benefit plans, some are not covered. For example, PBGC usually does not insure plans offered by:

  • "professional service employers" (such as doctors and lawyers) with fewer than 26 active employees enrolled in the plan (now and at all times in the past),
  • church groups, or
  • federal, state, or local governments.

PBGC does not insure defined contribution plans, which are retirement plans that do not promise specific benefit amounts at retirement, such as profit-sharing or 401(k) plans.

Your employer or plan administrator will be able to provide a copy of a Summary Plan Description that states whether your plan is covered by PBGC.

Yes. Under the single employer plan, there are three categories of termination:  

(1) Standard termination. An employer can voluntarily end a pension plan only after showing PBGC that the plan has enough money to pay all benefits-owed to participants. PBGC's guarantee ends when your employer purchases your annuity or pays you the lump-sum payment.

(2) Distress termination. An employer can voluntarily apply for a distress termination if the plan does not have enough money to pay all pension benefits owed to participants. The employer must be in financial distress and prove to PBGC or to a bankruptcy court that it cannot remain in business unless the plan is terminated. If the application is granted, PBGC normally takes over as trustee of the plan and pays plan benefits, up to the legal limits.

(3) Involuntary termination. Under the law, PBGC may take action and terminate a pension plan to protect the interests of the participants or the PBGC insurance program. For example, PBGC will pursue this approach if the plan is unable to pay benefits to its participants. As in a distress termination, PBGC becomes responsible to pay retirees their benefits, up to legal limits.

Your plan administrator must provide participants with an Annual Funding Notice about your defined benefit plan. The notice provides the following information: (1) how well your pension plan is funded; (2) the value of your pension plan's assets and liabilities; (3) how your pension plan's assets are invested; and (4) the legal limits on how much PBGC can pay if your pension plan ends.

Additionally, participants have a legal right to obtain funding information by requesting the data, in writing, from your plan administrator. It is important to note, however, that PBGC is required by law to calculate the underfunding of a plan using different assumptions than those used by the company. In most cases, this results in a higher estimate of underfunding. A plan may be fully funded under the employer's assumptions, but underfunded under the assumptions PBGC is required to use.

While PBGC insures your pension, the pension plan remains under the sponsorship of your employer. PBGC does not have any specific information about your benefit.

Under a standard or distress termination, the plan administrator must notify you in writing, known as a Notice of Intent to Terminate, at least 60 days before the proposed termination date.

Under an involuntary termination, when PBGC takes action to protect a pension plan or the pension insurance system, we will notify the plan administrator. PBGC will often publish a notice about this action in local and national newspapers as well as on our website, blog, and social media. Once PBGC takes over a plan, we will notify you.

In a standard termination, your plan administrator must send you a second letter describing the benefits you will receive, called the Notice of Plan Benefits. Generally, this notice must be sent no later than six months after the date proposed for your plan's termination.

In a distress termination or an involuntary termination (initiated by PBGC), our communication with you begins when we take over as trustee of your plan. Initially, we will give you general information about the pension insurance program and our guarantees. We will be able to provide more specific information about your benefits after we have had an opportunity to review the plan's records, assets, benefit liabilities, and the benefits you have earned in the plan.

No. You cannot earn any additional pension benefits under your plan after it terminates.

PBGC reviews your plan's records to determine the benefits each person will receive. The amount we pay is subject to limits set by law.

If you are already receiving a pension, we will continue paying you without interruption during our review. These payments are an estimate of the benefits that PBGC can pay under the insurance program. We will pay the benefits in the annuity form you chose at retirement, generally the same type of annuity that you were receiving from your plan.

If you have not yet retired, we will pay you an estimated benefit when you become eligible and apply to PBGC to begin payments. About four months before you are ready for your benefits to begin, call us toll-free at 1-800-400-7242 or contact us using our online service, My Pension Benefit Account (MyPBA).

We encourage you to sign up for electronic direct deposit so your benefit arrives in your bank account safely and securely each month.

When the review of all plan data and records is completed, we will notify you in writing of your benefit. If you are receiving an estimated benefit, the letter will inform you whether your future payments will change. If the amount you have been receiving is greater than the amount PBGC is allowed to pay, we will tell you how much your benefit will be reduced. You have the right to appeal our determination.

If your estimated benefits have been lower than the amount that PBGC ultimately determines you should be receiving, we will make up the difference in a single payment with interest when we have completed our review of your plan.

If your estimated benefits have been higher than the amount you should be receiving, we will correct your future monthly payments to the final amount as calculated by PBGC. Typically, payments will be further reduced by no more than 10 percent each month to account for the higher payments already received.

PBGC guarantees "basic pension benefits" as provided by your pension plan, subject to legal limits. These benefits include:

  • pension benefits at normal retirement age,
  • most early retirement benefits,
  • disability benefits, and
  • annuity benefits for survivors of plan participants.

The guarantee applies only to benefits earned before the plan terminates. However, if the plan terminates while your employer is in bankruptcy, the guarantee may be limited to benefits earned before the bankruptcy. Additional limitations may apply to certain airline industry plans.

The pension benefit PBGC pays depends on:

  • provisions of your plan,
  • the legal limits set by Congress,
  • the form of your benefit, and
  • your age.

Your benefit may also be affected by the assets in your pension plan, and by the amount  PBGC recovers in bankruptcy from your employer for plan underfunding.

PBGC's insurance program does not cover health and welfare benefits, severance and vacation pay, life insurance, lump-sum death benefits, certain other death benefits, and other non-pension benefits. PBGC does not make cost-of-living adjustments (COLAs) to the benefits it pays.

PBGC's maximum benefit guarantee is set annually and is published on our website near the end of the year. The maximum guarantee applicable to a plan is set as of that plan's termination date except for cases where termination occurs during a plan sponsor's bankruptcy. Under this circumstance, the maximum guarantee may be set as of the date the sponsor entered bankruptcy. An earlier date may apply to certain airline industry plans.

For 2019, the maximum guaranteed amount is $5,607.95 per month ($67,295.40 per year) for workers who begin receiving payments from PBGC at age 65. The maximum guarantee is lower if you begin receiving payments from PBGC before age 65 or if you receive your pension benefits in a form that provides benefits for a surviving spouse or other beneficiary. The maximum guarantee is higher if you are over age 65 when you begin receiving benefits from PBGC.

The tables on the maximum benefit guarantee page show PBGC's maximum guarantee at various ages based on the year the plan ended. For certain disability benefits, special rules apply (see the following question). Other guarantee limitations that may apply are described in the questions and answers that follow.

For 2019, the maximum guarantee for a disabled participant who begins receiving benefits from PBGC at age 65 is $5,607.95 per month ($67,295.40 per year). Unlike the maximum guaranteed benefit for non-disabled participants, that amount is not reduced before age 65, if:

  • Your disability dates from before your plan's termination date or the plan sponsor's bankruptcy date, as applicable; and
  • Your disability meets both your plan's disability requirements and those of the Social Security Administration; and
  • You remain disabled until age 65.

PBGC may require proof that you are disabled. If you were disabled, before the applicable date, a Social Security Administration disability certification maybe required by PBGC. 

Other adjustments to the maximum guarantee are the same as for non-disabled workers. The maximum guarantee is increased if you begin receiving payments from PBGC after age 65. It is reduced if your benefit form includes benefits for a surviving spouse or other beneficiary. See also Guarantees for Disabled Participants.


  • If your plan was created or amended to increase benefits within five years before the plan's termination date, your benefit may not be fully guaranteed. PBGC guarantees 20 percent of the benefit increase or $20 per month, whichever is greater, for each full year the benefit increase was in effect. If you own more than 50 percent of the business, stricter limits apply.
  • If you became eligible for additional benefits as a result of an event such as the shutdown of a facility that occurred after July 26, 2005, and less than five years before your plan's termination date, the increase is not fully guaranteed.
  • Additional limits may apply if the plan terminated while your employer was in a bankruptcy proceeding and for certain airline industry plans.
  • If your plan provides supplemental benefits, such as temporary payments, they may not be fully guaranteed. Generally, PBGC does not guarantee any monthly pension amount that is greater than the monthly benefit your plan would have provided if you had retired at your normal retirement age under the plan's straight-life annuity with no survivor benefits.

Special rules may apply if you are disabled.

Yes. PBGC will pay benefits to your surviving beneficiary if you elected a benefit form that provides survivor benefits.

  • If you chose an annuity that pays benefits for the life of your beneficiary (such as a joint-and-survivor annuity), PBGC will pay these benefits only to the beneficiary you chose when you retired. In such a case, if you remarry after you retire, your new spouse usually will not be entitled to a survivor benefit.
  • If you chose an annuity that pays a beneficiary only for a limited period of time (such as a certain-and-continuous annuity), upon your death, PBGC will pay any remaining benefits to your most recently named beneficiary.

qualified domestic relations order (QDRO) also may affect benefit payments.

PBGC allows all future retirees, whether married or not, to elect a benefit form that provides survivor benefits and to name a beneficiary at that time.

If you are married and die before retiring, we pay your surviving spouse a survivor benefit. Your spouse can begin this benefit as early as the date your plan permits you to retire, but typically no earlier than your 55th birthday.

If you are entitled to or are receiving a survivor benefit when your plan terminates, PBGC will pay or continue to pay your survivor benefit for the period provided by your plan.

You may choose to receive your benefit in one lump sum only if:

  • Your plan terminated before 2024 and the value of your benefit is no more than $5,000, or
  • Your plan terminates in 2024 or later and the value of your benefit is no more than $7,000.

Yes. Most traditional IRAs or other qualified retirement plans will accept your lump-sum payment from PBGC. If you want PBGC to pay the lump sum directly to your IRA or other plan, we will not withhold tax from the payment. With this type of payment, called a "tax-free rollover," you will not have to pay tax until you receive payments from the IRA or other plan.

You can get more information about tax-free rollovers by contacting your local Internal Revenue Service office, calling 1-800-TAX-FORM, or visiting

Yes. PBGC generally offers a range of choices if your annuity begins after we trustee your plan. The choices are explained at Your PBGC Benefit Options. At the time you retire, we will tell you the amount you can receive under each of these annuity choices. If you are married at the time you retire, you may need to obtain the consent of your spouse to elect some forms of benefit.

No. There is no cost-of-living adjustment under the law.

PBGC only withholds federal income taxes and certain court-ordered deductions. You will have to pay separately any state taxes or other amounts (such as health insurance) now being deducted.

If you have questions about your plan or benefits under a pension plan that is still in operation, contact your employer.

If your plan has ended and been taken over by PBGC, call us toll-free at 1-800-400-7242 or visit our website at

TTY/ASCII users may call 711.

Representantes que hablan español están dispuestos a ayudarle en nuestro Centro de Contacto del Cliente: 1-800-400-7242.

If you are uncertain whether your plan is still in operation, you can write to us at:

Pension Benefit Guaranty Corporation 
Processing and Technical Assistance Branch 
445 12th Street SW
Washington, DC 20024-2101

For further information on tracking down a pension, see Additional External Resources for Finding an Unclaimed Pension.

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