It's not an astounding jump … but at least it's something.
The Pension Benefit Guaranty Corporation announced Tuesday that the yearly maximum guaranteed benefit for a 65-year-old retiree has increased to almost $57,500 from $56,000.
Nearly 85 percent of retirees who get their pension from PBGC receive the full amount of their promised benefit. In some cases, retirees can receive more than the PBGC maximum guarantee. (For more information, read the agency's "Making Sense of the Maximum Insurance Benefit.")
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Like Social Security, the PBGC maximum guarantee is based on a formula that is higher for those at full retirement age (65, at present) and lower for those who retire earlier or are drawing survivor benefits. The scale is quite broad and can go as high as nearly $175,000 for some older recipients.
If a pension plan ends in 2013, but a retiree does not begin collecting benefits until a future year, the 2013 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 2013, the maximum yearly guarantee for a 65-year-old retiree is $57,477.24. The increase is not retroactive.
For more information, see PBGC's fact sheet "Pension Guarantees".
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