PBGC sets 2009 maximum insurance benefit

The new figure will apply to participants in underfunded pension plans terminating next year, with the amount higher for those who retire later and lower for those who retire earlier or elect survivor benefits.

The PBGC said its research showed the overwhelming majority of the participants in plans taken over by the agency faced no reduction in benefits due to the legal limits on coverage.

The largest reductions occurred in cases where participants earned pensions that significantly exceeded the maximum insurance benefit, or provided generous early retirement subsidies.

The announcement of the slight rise comes despite recent evidence in the House Education and Labor Committee which showed the federal corporation had lost $4.79bn in stocks in fiscal year 2008, with the loss in September alone at $1.7bn.

At the time, PBGC director Charles Millard claimed the agency was in a stronger position than a year ago, despite the losses (www.globalpensions.com; 27 October 2008).