The Pension Benefit Guaranty Corporation announced its updated guarantee limits and premium rates for 2024.
The maximum guarantee limits— the amount the PBGC will pay participants in the event a pension fails—will increase by 5.3% for single-employer plans for plans that fail in 2024, it was announced Tuesday. The exact maximums vary based on participants’ age and choice of annuity.
The PBGC provided a table outlining monthly guaranteed payments in 2024 for each age and annuity choice (straight life annuities or 50% joint and survivor annuities), in the event a pension fails. Younger participants have lower monthly guarantees to account for their longer remaining lifespans.
Multiemployer plans are not indexed to inflation for the purpose of guarantees.
The PBGC also updated its premium rates—the insurance payments that pensions make to the PBGC—in an announcement made last Friday. Section 349 of the SECURE 2.0 Act of 2022 froze the variable rate premium at 5.2% of unfunded liabilities by de-linking it from inflation for single-employer plans.
Other determinants in rate-setting are still indexed to inflation, however. The maximum per-participant cap for the variable rate—the highest the 5.2% can reach—is $686 for 2024, up from $652 in 2023. The flat-rate fee for single-employer plans will go up to $101 for 2024 from $96 in 2023.
Multiemployer plans only pay a per-participant premium, which will increase to $37 in 2024 from $35 in 2023.Tags: Multiemployer, PBGC, PBGC premiums, secure 2.0, Single Employer Pension Plan, variable rate premium