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FOR IMMEDIATE RELEASE
November 03, 2008
PBGC News Division
202-326-4343
PBGC Announces Maximum Insurance Benefit for 2009
WASHINGTON-The Pension Benefit Guaranty Corporation (PBGC) today announced that the maximum insurance benefit for participants in underfunded pension plans terminating in 2009 is $54,000 per year for those who retire at age 65, up from $51,750 for 2008. The amount is higher for those who retire later and lower for those who retire earlier or elect survivor benefits (see chart). If a pension plan terminates in 2009 but a participant does not begin collecting benefits until a future year, the 2009 maximum insurance limits still apply. The Pension Protection Act of 2006 provides that the maximum benefit payable is determined by the legal limits in force on the date of the plan sponsor's 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/media/key-resources-for-the-press/content/page13542.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 2009 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.
PBGC is a federal corporation created under ERISA. It currently guarantees payment of basic pension benefits earned by 44 million American workers and retirees participating in over 30,000 private-sector defined benefit pension plans. The agency receives no funds from general tax revenues. Operations are financed largely by insurance premiums paid by companies that sponsor pension plans and investment returns.
