Your benefit determination will tell you the amount of your benefit, whether you have been overpaid or underpaid, how we will address any underpayments or overpayments, and will explain your appeal rights.
PBGC can pay benefits only up to the limits set by the Employee Retirement Income Security Act (ERISA). See the section just below, "Effect of the PBGC Legal Limits on the Hourly Plan," for more information.
When PBGC takes over a plan, we adjust benefits as soon as practicable (usually in about six to ten months after termination) for retirees receiving more than the legal limits. These are considered estimated benefits because we do not yet have all the data and plan information to determine final benefits so soon after termination.
In 2010, PBGC adjusted benefits for retirees with benefits above the legal limits. Participants who retired after January 2010 received an estimated benefit reduced to the legal limit.
First, PBGC determines the amount that is "guaranteed." This is the legal limit on the amount PBGC can pay regardless of the amount of assets in the pension plan. Determining the guaranteed amount can be complicated, but in general, there are three limits that most commonly apply to participants' benefits. All the legal limitations are applied independently, so more than one limitation may apply. The three limits are:
The PBGC Maximum Guarantee:
This is a flat dollar amount based on the year your plan terminated, your age when you begin receiving benefits from PBGC, and the form of your benefit.
Since Delphi's plans were terminated in 2009, their participants' maximum guarantees are based on 2009 amounts.
For 2009 terminations, the maximum guarantee is $4,500 per month ($54,000 per year) for a benefit that is payable at age 65 and does not include a survivor benefit. That amount is reduced if PBGC payments start before age 65 or you select a form of benefit that provides for survivor payments. For certain disability benefits the maximum guarantee is not reduced for PBGC payments starting before 65. You can find more information about the maximum guarantee payable at other ages and in other types of annuity.
The "Accrued at Normal" Limit:
Some pension plans, such as Delphi's, feature a temporary supplement to bridge the gap between early retirement age and Social Security retirement age. Because PBGC cannot pay more than what the plan would have paid had you retired at the normal retirement age in the normal benefit form, most supplements are not guaranteed.
Since the Delphi plan paid supplements during early retirement, participants who received the supplement are likely to be affected by this limit.
Federal pension law limits any benefit increases that have been in effect for less than five full years before the date of plan termination. PBGC will guarantee 20 percent of the monthly benefit increase (or, if greater, $20 per month) for each full year the increase was in effect. For example, PBGC would pay 40 percent (or $40) of a benefit increase in effect for two full years before plan termination, 60 percent (or $60) of an increase in effect for three full years, and 80 percent (or $80) of an increase in effect for four full years.
To determine whether a benefit increase has been in effect for a full year or more, PBGC uses either the effective date of the increase or the adoption date of the plan amendment that created the increase, whichever is later.
In certain trusteed plans PBGC is able to pay some participants benefits that exceed the legal limits discussed above. This can occur if the plan has sufficient assets to fund benefits above the guarantee, or if PBGC recovers additional funds from the plan sponsor through bankruptcy proceedings.
The Benefit Determination that we send you shows the benefits for which you are eligible. The plan incorporates three sets of provisions:
- the Traditional Plan;
- the USWA $12 Plan, a sub-plan within the Traditional Plan for a group of participants hired in the 1990’s; and
- the Cash Balance/Individual Retirement Plan for UAW represented employees.
You may have earned benefits under more than one set of provisions.
If you were hired before May 3, 2004, you will receive a Traditional retirement benefit based on years of service and a benefit rate. You may also be eligible for an Early Retirement Supplement or Interim Supplement until age 62 and one month.
If you were hired between 1991 and 6/15/1998, you will receive a USWA $12 Plan benefit based on years of service and a benefit rate.
If you were hired or were rehired on or after May 3, 2004, you will receive a Cash Balance benefit. A Cash Balance benefit is defined as a hypothetical account balance based on a formula using pay credits and interest credits. The hypothetical account balance is converted into a monthly benefit when you retire.
You can choose when to begin your benefit, once you become eligible to retire. Your Benefit Determination Statement will include information on when you can begin receiving your benefit, and the type of benefits you are eligible to receive. How soon you can start receiving benefits depends on what retirement type(s) you are eligible to receive.
Normal - Age 65 and Older (Normal Retirement): Any participant can retire at age 65.
Separation with Vested Benefit (Deferred Vested Retirement): Any participant can retire as early as age 55. If you begin receiving benefits before age 65, your benefits will be reduced for early retirement.
30-Year Retirement: If you had at least 30 years of service with Delphi before July 31, 2009, you can retire immediately at any age.
Any payments you receive before age 62 will be reduced for early retirement. However, your benefit includes an Early Retirement Supplement payable until age 62 and one month. Due to PBGC's legal limits, as explained above, PBGC may be able to pay only some or none of the supplement.
Any payments you receive on and after age 62 will not be reduced for early retirement. The reduction to the benefit for early retirement that occurs before age 62 is removed starting with the payment at age 62 and one month. However, any Early Retirement Supplement payments you may be receiving also stop at age 62 and one month.
85-Points (Rule-of-85 Retirement): If, as of July 31, 2009, you worked for Delphi until at least age 55, and your age plus your years of service total 85 or more, you can retire immediately at any age.
Any payments you receive before age 62 will be reduced for early retirement. However, your benefit also includes an Interim Supplement payable until age 62 and one month. Due to PBGC's legal limits, as explained above, PBGC may be able to pay only some or none of the supplement.
Any payments you receive on and after age 62 will not be reduced for early retirement. The reduction to the benefit for early retirement that occurs before age 62 is removed starting with the payment at age 62 and one month. However, any Interim Supplement payments you may be receiving also stop at age 62 and one month.
60 &10 Retirement: If you worked for Delphi until age 60 and had 10 or more years of service as of July 31, 2009, you can retire immediately at any age.
If you begin receiving benefits before age 62, your benefits will be reduced for early retirement.
- If you have 85-points at retirement, the reduction to the benefit for early retirement that occurs before age 62 is removed starting with the payment at age 62 and one month.
- If you have fewer than 85-points at retirement, the reduction for early retirement that occurs before age 62 is permanent.
Your benefit also includes an Interim Supplement payable until age 62 and one month. Due to PBGC's legal limits, as explained above, PBGC may be able to pay only some or none of the supplement. Any Early Retirement Supplement payments you may be receiving stop at age 62 and one month.
If you begin receiving benefits on or after age 62, your benefits will not be reduced for early retirement.
Under the Internal Revenue Code and PBGC rules, you must begin receiving benefits by your Required Beginning Date, which is generally no later than April 1 of the calendar year following the year you reach age 70 1/2.
Where a participant died before retiring, the Required Beginning Date for his or her Surviving Spouse is determined as follows:
First, determine the later of:
- the year in which the participant died, or
- the year in which he or she would have reached age 70 1/2.
Next, determine the calendar year that immediately follows the year determined above: December 1st of that year is the Required Beginning Date.
Once you become eligible to retire, PBGC allows you to choose the date when you want your annuity benefits to begin. However, PBGC will generally only pay benefits prospectively, which means that you cannot choose a retirement date that is in the past. Therefore, to make sure that your benefits start on the future date you want, contact us about four months before you want to retire.
Under limited circumstances, you may be eligible to retire retroactively. For example, if you have an Early Unreduced Retirement Date that has already passed when you receive your Benefit Determination, you may be eligible to begin benefits as of that date even though it is in the past. In that case, you would receive a back payment for benefits due between your Early Unreduced Retirement Date and the date your monthly payments begin.
Your Benefit Determination will tell you if you are eligible for a retroactive retirement date. If you are eligible for a retroactive retirement date, please contact us immediately to begin receiving your monthly benefits and your back payment.
Ordinarily, benefits that begin before normal retirement age are reduced to account for the longer time they will be paid. However, if you meet certain conditions as of July 31, 2009, your plan provides benefits beginning before your normal retirement age that aren’t reduced for early retirement. That is, the plan would pay the same amount at an early retirement date as it would at your normal retirement date.
Your Benefit Determination Statement will tell you if you are eligible for early unreduced retirement and will indicate your earliest unreduced retirement date.
Please see the descriptions of the different retirement types above for more information on early unreduced retirement benefits in your plan.
Yes. In the past, PBGC did not pay pension benefits to workers who continued to work for the company that had sponsored the pension plan. PBGC rescinded its working retirement rule as of June 1, 2021. If you are entitled to a Delphi Hourly pension benefit and start receiving payments on or after June 1, 2021, you may receive that benefit even if you are still working. You may work for any company, including companies with a coordination of benefits agreement with Delphi.
Only if your benefit was very small. PBGC pays lump-sums only if the total value of the benefit is $5,000 or less. If your benefit is greater than $5,000, we will pay you an annuity each month for the rest of your life.
Yes. If you are owed a lump-sum payment, we will pay you interest from the Date of Plan Termination, July 31, 2009 to the date of payment. If, for example, you receive your lump sum in 2016, the total interest accrued over the more than seven years since the plan terminated will be about 13%. You could expect to receive about 13% more than the lump sum amount determined as of the Date of Plan Termination.
If you die after you start receiving benefits:
The form of benefit you choose when you retire will determine whether or not your spouse (or another beneficiary) will receive a benefit when you die.
If you die before you start receiving benefits:
If you are married and die before you start receiving benefits, your surviving spouse will be entitled to a Qualified Pre-Retirement Survivor Annuity (QPSA). The QPSA is the survivor portion of the plan’s Normal Form of Benefit for married participants.
If you are already eligible to begin receiving benefits when you die, your spouse can begin receiving QPSA benefits immediately upon your death. If you are not yet eligible to begin receiving benefits when you die, your spouse can begin receiving QPSA benefits on the date when you would have first become eligible to begin receiving benefits.
The HCTC is an IRS tax credit for health care insurance premiums, which may apply to certain individuals who are 55 to 65 years of age and receive benefits from PBGC. For more information on the HCTC, see our frequently asked questions.
To avoid any interruption in benefit payments to retirees in terminated plans that PBGC takes over, PBGC makes payments to retirees on an estimated basis until we can determine final benefits. We strive to make our estimates as accurate as possible. In some cases benefit underpayments result because the estimate is less than the amount the individual was entitled to receive.
Yes. If you have been underpaid, we will send you a single lump-sum payment with interest to make up the difference between the amount we paid you and the amount you were entitled to receive.
If your lump-sum payment is less than $5,000 or less than three times your monthly benefit, PBGC will make the payment automatically. If you get your monthly payments by check, we will issue you a check for the underpayment; if you receive your payments by electronic deposit, we will issue your lump sum by electronic deposit.
If your lump-sum payment is $5,000 or more and at least three times the amount of your monthly benefit, you will need to apply for the lump-sum payment. In that case, your benefit determination will include an Application for Lump-Sum Payment.
If your lump-sum payment is $5,000 or more and at least three times the amount of your monthly benefit, you have the option of rolling the payment over into an Individual Retirement Account (IRA) or another qualified retirement plan. This decision has important tax consequences. The Application for Lump-Sum payment gives you the opportunity to choose whether you want to receive the lump-sum payment directly or roll it over, and provides you with information to help you make an informed decision.
For each month in which PBGC paid you estimated benefits, we look at the difference between what you were entitled to receive and what you received to determine whether you were overpaid or underpaid in that month. PBGC then sums up all the monthly underpayments and/or overpayments. In performing this determination, PBGC pays interest on underpayments.
Yes – PBGC pays interest on all underpayments.
If PBGC has determined that your final benefit amount is greater than the estimated benefit you are currently receiving, we will increase your benefit, even if you file an appeal.
If PBGC has determined that your final benefit amount is less than the estimated benefit you are currently receiving, we will not change your benefit until the Appeals Board has issued a decision. In that case, you will continue to receive your estimated benefit.
Yes. You will still receive a lump-sum payment for your underpayment even if you appeal your benefit. We will not delay the payment while your appeal is pending.
Once the Appeals Board has issued its decision, we will recalculate any over- or underpayment you have received based on your final monthly benefit (as determined by the Appeals Board) and all payments you have received as of that date. If you have been underpaid, we will issue you another lump-sum payment.
To avoid any interruption in benefit payments to retirees and beneficiaries in terminated plans that PBGC takes over, PBGC initially makes benefit payments at the level promised by the plan. Once we have sufficient information, we adjust benefits to an estimate of the amount that PBGC can legally pay. For the Delphi Hourly plan, PBGC made most of these adjustments about six to ten months after we became responsible for your pension plan. Most overpayments -- payments that are greater than the amount participants are entitled to receive -- are due to those earlier payments at the plan benefit level.
Even when PBGC adjusts benefits, they are still considered estimated benefits until we determine the final benefit amounts due from PBGC under the terminated plan. Because these are estimated payments, some individuals may receive additional overpayments or underpayments until their final benefits are determined.
No – you will not have to repay the overpayment in single lump sum. To reduce the burden on participants and beneficiaries, PBGC collects the overpayment by “recoupment,” which means that we collect the amount you have been overpaid by reducing your monthly benefit by a percentage called the recoupment percentage. Recoupment is designed to spread the reduction out over the expected duration of the benefit (including payments to your beneficiary, if any). Once the overpayment has been repaid, we stop the reduction for recoupment.
Generally, we limit the recoupment percentage to no more than 10% of your monthly benefit.
Your Benefit Determination will tell you the recoupment percentage and the amount of your benefit before and after the recoupment percentage is applied.
Yes. If your benefit changes in the future, this same recoupment percentage will be applied to that benefit until the overpayment has been repaid. For example, say you are receiving a supplement that is payable until age 62 and one month, and that your benefit equals $2,500 before age 62 and one month and $2,000 thereafter.
Also, say that your recoupment percentage equals 2% of your benefit amount.
Your benefit before age 62 and one month with the recoupment percentage applied is $2,450, determined as follows:
Monthly Benefit until age 62 and one month: $2,500 (before recoupment)
Recoupment amount = $2,500 x 2% = $50
Monthly Benefit until age 62 and one month: $2,500 - $50 = $2,450
Your benefit after age 62 and one month with the recoupment percentage applied is $1,960, determined as follows:
Monthly Benefit after age 62 and one month: $2,000 (before recoupment)
Recoupment amount = $2,000 x 2% = $40
Monthly Benefit after age 62 and one month: $2,000 - $40 = $1,960
Yes. The same recoupment percentage will apply to the payments to your survivor until the overpayment has been repaid.
For each month in which PBGC paid you estimated benefits, we look at the difference between the amount you were entitled to receive and the amount you did receive to determine whether you were overpaid or underpaid in that month. PBGC then sums up all the monthly underpayments and/or overpayments month by month.
The result is the net overpayment or underpayment. PBGC does not charge interest on overpayments, but it does pay interest for any month in which your over-/underpayment balance is a net underpayment.
Yes. Please refer to the question above on how PBGC determines the amount of your overpayment. You will see that we take into account all underpayments when we determine the amount of your overpayment.
No. PBGC does not charge interest on overpayments.
Yes. Some participants may have been overpaid in the past, but also are receiving an estimated benefit that is less than the amount they are entitled to receive.
When this occurs, PBGC will increase your benefit to the amount you are entitled to receive, even if you file an appeal. And we will not apply recoupment until the appeal is decided.
No. If you appeal, PBGC will not reduce your benefit and will not apply recoupment for prior overpayments until the appeal is decided. If the Appeals Board determines that the amount you had been receiving is more than you are entitled to, any excess amounts you receive during the appeals period will be included in your total overpayment.
Once the Appeals Board has issued its decision, we will recalculate any over- or underpayment you have received based on your final monthly benefit (as determined by the Appeals Board). All payments you have received as of the date of the Appeals Board determination will be included in the recalculation.
If you have been overpaid, we will start reducing your monthly benefit to recoup the overpayment at that time.