By Paula Aven Gladych
Beginning in 2014, the maximum amount of pension benefits retirees are guaranteed to receive under the Pension Benefit Guaranty Corporation
will increase 3.2 percent to $59,320.
The maximum yearly guarantee in 2013 was $57,500. According to the PBGC, 85 percent of retirees who receive their pension benefits from the PBGC receive the full amount of their promised benefit and - in some cases - retirees can receive more than the PBGC maximum guarantee.
The PBGC maximum guarantee is based on a formula prescribed by federal law. Yearly amounts are higher for people older than age 65 and lower for those who retire earlier or choose survivor benefits.
If a pension plan ends in 2014, but a retiree
does not begin collecting benefits until a future year, the 2014 rates still apply. For plans that terminate as a result of bankruptcy, the maximum yearly rates are guided by the limits in effect on the day the bankruptcy started, not the day the plan ended.
The increase is not retroactive and applies only to single-employer pension plans
. The maximum guarantee limit for participants in multiemployer plans is $12,870 for those with 30 years of service. That guarantee has been in place since 2001.
Originally published on BenefitsPro.com