PBGC Raises Guarantee Limit for 2018
The Pension Benefit Guaranty Corporation (PBGC) announced on Oct. 30 that the guarantee limits for single-employer plans that fail in 2018 will be 0.95% higher than the limits that applied for 2017. The PBGC made the adjustment due to ERISA indexing rules.
The PBGC maximum guarantee for participants in single-employer plans is determined using a formula prescribed by federal law that calls for periodic increases tied to a Social Security index. It provides lower amounts for younger participants reflecting the assumption that they will receive more monthly pension checks over their expected lifetime than older participants. Conversely, amounts are higher for older ages. The formula also calls for reducing the amount for retirees who choose a payment form that continues benefits to a beneficiary after the retiree’s death.
The maximum guarantee tables for various ages and payment forms for 2018 and earlier years are provided here
The guarantee limits for multiemployer plans
are not indexed and therefore have not changed.