Employee Benefits News examines legal developments that impact the employee benefits and executive compensation employers provide, including federal and state legislation, rules from federal...
Oct. 28 — Some pension plan participants will be getting added protection for their accrued plan benefits. That’s because the federal agency tasked with backstopping these benefits will be increasing the guaranteed limit it will pay for certain defined benefit plans that fail in 2017.
The Pension Benefit Guaranty Corporation announced Oct. 28 that such guaranteed limits for single-employer plans that fail in 2017 will rise from the limit applicable to plans that failed in 2015 and 2016.
Under the new guarantees, a 65-year-old participant could be eligible for an annual maximum single-life annuity of $64,432, which is 7.1 percent above the $60,136 maximum currently available. The annual maximum 50 percent joint and survivor annuity for a 65-year-old will rise to $57,989, up 7.1 percent from $54,123 used for plans failing in 2016.
The guaranteed maximum benefit for multiemployer plans is much less and generally considered to be an annual annuity of $12,870 for those who participated in their plan for 30 years. Multiemployer plans are generally collectively bargained and involve more than one employer.
Single-employer plan sponsors in 2017 will pay flat rate annual plan insurance premiums to the PBGC of $69. Multiemployer plan sponsors will pay flat rate premiums of $28.
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The agency’s announcement is at http://www.pbgc.gov/news/press/releases/pr16-16.html.
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