The maximum benefit applies to retirees in underfunded single-employer defined benefit plans that terminate in the year 2001.
PBGC coverage provides a safety net for workers, particularly when an employer declares bankruptcy, and pension plan assets are not sufficient to meet the obligations of the plan.
The guarantee amount applies to retirees at age 65, and is adjusted for those who retire at other ages, or who elect survivor benefits. In some instances, where a pension plan has adequate resources or PBGC recovers sufficient amounts, a participant may receive benefits in excess of the maximum guarantee.
The Employee Retirement Income Security Act of 1974 (ERISA) requires that the maximum guaranteed amount be adjusted annually based on changes in the Social Security contribution and wage base. Last year the PBGC maximum monthly benefit was $3,221.59.
About 532,000 workers and retirees in over 2,700 pension plans rely on PBGC for their retirement income.
The PBGC will publish the 2001 maximum guarantee in the December 1, 2000, Federal Register.
– Nevin Adams firstname.lastname@example.org
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