The Pension Benefit Guaranty Corporation (PBGC) has issued new materials for use by a variety of practitioners: the guarantee limits for single-employer plans for 2019, and a reference tool for use when advising small plans about possible reportable events.
Guarantee Limits
The guarantee limits for single-employer plans that fail in 2019 will be 3.46% higher than the limits that applied for 2018, 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 2019 and earlier years are available on the PBGC's website.
Reportable Events Sheet
The PBGC has created a reference tool to help practitioners when advising small plans (those with 100 or fewer participants) about possible reportable events. The tool, which is provided in the form of a checklist, provides information about what may constitute a reportable event and what may trigger it, as well as the applicable PBGC form to be used in a specific case. It can be found here; it also can be found through the PBGC’s Reportable Events and Large Unpaid Contributions page.
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