The PBGC has issued new guarantee limits for single-employer plans that fail in 2020 which will increase by 3.65% over 2019 limits, due to ERISA indexing requirements. Regrettably, the guarantee limits for multiemployer plans are not indexed and therefore have not changed. The PBGC maximum guarantee for participants in single-employer plans is determined using a formula prescribed by federal law that calls for periodic increases tied to a Social Security index.
For a 65-year-old whose plan has failed in 2020, the maximum monthly guarantee will now be $5,812.50 ($5,231.25 for Joint and 50% Survivor Annuity). The guarantee for a 65-year-old in a multiemployer plan remains at $12,870 for the YEAR, which is why we need pension reform approved this year in order to preserve the more than 120 critical and declining plans before plan participants are thrust into the PBGC insurance pool that is leaking badly!