The Pension Benefit Guaranty Corporation (PBGC) Maximum Insurance Benefit
Selected Year: 2012
AGE
ANNUAL MAXIMUM
MONTHLY MAXIMUM
MONTHLY JOINT & 50% SURVIVOR MAXIMUM
45
$13,960.20
$1,163.35
$1,047.02
46
$15,077.04
$1,256.42
$1,130.78
47
$16,193.88
$1,349.49
$1,214.54
48
$17,310.72
$1,442.56
$1,298.30
49
$18,427.56
$1,535.63
$1,382.07
50
$19,544.28
$1,628.69
$1,465.82
51
$20,661.12
$1,721.76
$1,549.58
52
$21,777.96
$1,814.83
$1,633.35
53
$22,894.80
$1,907.90
$1,717.11
54
$24,011.64
$2,000.97
$1,800.87
55
$25,128.36
$2,094.03
$1,884.63
56
$27,362.04
$2,280.17
$2,052.15
57
$29,595.72
$2,466.31
$2,219.68
58
$31,829.28
$2,652.44
$2,387.20
59
$34,062.96
$2,838.58
$2,554.72
60
$36,296.64
$3,024.72
$2,722.25
61
$40,205.52
$3,350.46
$3,015.41
62
$44,114.28
$3,676.19
$3,308.57
63
$48,023.16
$4,001.93
$3,601.74
64
$51,932.04
$4,327.67
$3,894.90
65
$55,840.92
$4,653.41
$4,188.07
The Pension Benefit Guaranty Corporation (PBGC) maximum insurance benefit for participants in underfunded pension plans terminating is contained in the table below per year of retirement, as well as for age within the year of retirement.
The amount is higher for those who retire later and lower for those who retire earlier or elect survivor benefits (see chart). For example, if a pension plan terminates in 2007 but a participant does not begin collecting benefits until a
future year, the 2007 maximum insurance limits still apply.
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. For more information, see PBGC's fact sheet "Pension Guarantees"
(http://www.pbgc.gov/media/key-resources-for-the-press/content/page13542.html).
More than 90 percent 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 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 2007, 2006, and 2005 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 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 remaining
lifespan.
