PBGC Announces Maximum Insurance Benefit Increases for 2012

November 23, 2011 (PLANSPONSOR.com) - The Pension Benefit Guaranty Corporation announced that the yearly maximum benefit a 65-year-old retiree can receive has increased to almost $56,000 from $54,000 in effect since 2009.

The amount PBGC pays retirees is based on a formula prescribed by federal law. Yearly amounts are higher for people older than age 65, and lower for those who retire earlier or choose survivor benefits. Most retirees who get their pension from PBGC (more than 85%) receive the full amount of their promised benefit. 

If a pension plan ends in 2012, but a retiree does not begin collecting benefits until a future year, the 2012 rates still apply. For plans that terminate as a result of bankruptcy, the maximum yearly rates are guided by the limits in effect on the day the bankruptcy started, not the day the plan ended. 

Beginning in 2012 the maximum yearly benefit for a 65-year-old retiree is $55,840.92. The increase is not retroactive. 

For more information, see PBGC's fact sheet Pension Guarantees at http://www.pbgc.gov/res/factsheets/page/guar-facts.html.