PBGC Sets Present Maximum Guarantee Values for 2021

The Pension Benefit Guaranty Corporation (PBGC) on Oct. 26 posted the applicable present values for maximum guarantees for 2021 plan years. 

The PBGC provides the values in a table that contains the present values of its maximum guarantee for purposes of the Code Section 436(d)(3) restriction. 

Specifically, Section 436(d)(3) and ERISA Section 206(g)(3)(C) provide that if the “adjusted funding target attainment percentage” is at least 60% but less than 80%, the plan may not pay a prohibited payment to the extent the payment exceeds the lesser of:

• 50% of the amount of the payment that would be paid if the restriction did not apply, or
• the present value, determined under guidance provided by the PBGC, of the maximum guarantee with respect to the participant under ERISA Section 4022.

The PBGC table shows, for the calendar year, the applicable present value amount based on the age of the participant. A two-column spreadsheet of the values is online here.