For pension plans terminated in 2004, the maximum monthly guaranteed amount will be $3,698.86 a month, or $44,386.32 annually, the PBGC said in a news release. This number is up from 2003’s maximum annual amount of $43,977.24 (See PBGC Releases 2003 Maximum Guaranteed Benefits ).
>However, the maximum monthly payments to participants starting to receive benefits from terminated single-employer plans in 2004 are only applicable to retirees over the age of 65. For younger retirees, the PBGC adjusted monthly and annually totals down based on the fact that these retirees receive more monthly pension checks over a longer remaining lifespan. Downward adjustment for 2004 include:
- Age 55 – $1,664.49 monthly
- Age 60 – $2,404.26 monthly
- Age 62 – $2,922.10 monthly
- Age 64 – $3,439.94 monthly.
>PBGC said the final rule is necessary because of annual changes to maximum guaranteed amounts based on changes to the contribution and benefit base under Section 230 of the Social Security Act. The PBGC will publish the 2004 maximum guarantee in the December 1, 2003 Federal Register.
The PBGC is a federal corporation created under the Employment Retirement Income Security Act (ERISA), which currently guarantees payment of basic pension benefits earned by 44 million American workers and retirees participating in about 32,500 private sector defined benefit pension plans.