The third legal limitation that will affect your benefits payable in your plan is the Phase-In Limitation.
The Phase-In rule limits PBGC’s guarantee of benefit increases that were made within 5 years of the date your plan was terminated. PBGC will pay the greater of 20% of the increase or $20 per month for each full year the increase was in effect. For example, for a benefit increase made one year before DoPT, PBGC will calculate what 20% of the increase would be. We will then pay you whichever is greater - 20% of the increase or $20 - but not more than the actual increase.
There were some increases to the benefits in your plan within the 5 years before DoPT. For example, the benefit rates used to determine the Basic Benefit and some of the supplements were increased each year up through October 1, 2006. Also, the plan provided Mutually Satisfactory Retirement benefits to some employees based on plant closings and permanent layoffs that happened within 5 years of DoPT. These increases may not be fully guaranteed. There may also be additional items subject to the Phase-In Limitation that PBGC learns about as we continue to process your plan.
For example, let’s consider the benefit rate increase effective on October 1, 2006 that was more than 2 years before July 31, 2009, the date of plan termination, but less than 3 years before that date. So, it was in effect for 2 full years before the DoPT. That benefit increase, along with any other increases that occurred 2 full years before the DoPT, are guaranteed up to the greater of 40% of the increase or $40, but not more than the actual increase.