The Pension Benefit Guaranty Corporation (PBGC) has issued guarantee limits for single-employer plans for 2020.
The guarantee limits for single-employer plans that fail in 2020 will be 3.65% higher than the limits that applied for 2019, due to indexing ERISA requires. 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.
The formula provides lower amounts for younger ages, reflecting the fact that younger people will receive more monthly pension checks over their expected lifetime; conversely, amounts are higher for older ages. The formula also calls for reducing the amount for retirees who choose a payment form that continues benefits to a beneficiary after the retiree’s death.
A table showing the single-employer plan guarantee limits for various ages and payment forms as well as the maximum guarantee tables for 2020 and earlier years are available on the PBGC's website.
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