October 2023 Compliance News Article
PBGC 2024 Levels
Pension Benefit Guaranty Corporation (PBGC) announced the flat and variable rate premium amounts as well as the maximum benefit levels for various purposes for 2024.
Flat and Variable-Rate Premiums
As in previous years, PBGC announced an increase to the flat and variable-rate premiums for plan years beginning in 2024. The table below highlights the changes from last year.
| Plan Type | Flat-Rate Premium | Variable-Rate Premium | ||
|---|---|---|---|---|
| 2023 | 2024 | 2023 | 2024 | |
| Single-Employer | $96 | $101 | $52* $652 Per Participant Cap |
$52* $686 Per Participant Cap |
| Multiemployer | $35 | $37 | Not Applicable | |
*per $1,000 of unfunded vested benefits
Maximum Benefit for 2024
PBGC also increased the guaranteed maximum monthly benefit for participants in under-funded single-employer pension plans in 2024. Multiemployer plan maximum guarantees are calculated differently and are not based on an indexed amount.
Here is a table that compares 2023 and 2024 maximum monthly benefits for a 65-year-old in a single-employer plan.
| Payment Option | 2023 Maximum Benefit | 2024 Maximum Benefit |
|---|---|---|
| Straight Life | $6,750.00 | $7,107.95 |
| Joint and 50% Survivor* | $6,075.00 | $6,397.16 |
Present Value of Maximum Guarantee
When a defined benefit plan’s Adjusted Funding Target Attainment Percentage (AFTAP) is at least 60% but less than 80%, the plan must generally limit accelerated benefits, like lump sum distributions, to the lesser of:
- 50% of the payment that would be paid if the restriction did not apply, or
- The present value of the PBGC maximum guarantee
PBGC announced the present value of the maximum guarantee for 2024 is $1,024,251 for a 65-year-old individual. This is down from $1,067,191 in 2023. The maximum guarantee is adjusted for different ages. A complete table can be found at www.pbgc.gov.
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