Pension Guaranteed

The fourth post I made to this blog (which I started in 2009 after getting laid off from IBM) was about the Pension Benefit Guarantee Corporation (PBGC) which is an US government agency which insures private pensions up to certain limits.  These limits were of interest to me as I was planning to start taking an early retirement pension from IBM later that year.  For people who have started collecting a pension before their plan fails the insurance limit is determined by the year in which their plan fails and their age at that time.  This means the limit increases from calendar year to calendar year (due to an annual inflation adjustment which is sometimes 0) and on birthdays (due to a formula which guarantees larger amounts as your age increases from 45 to 75). 

The upshot was that when I started taking my pension later in 2009 as planned less than half of it was guaranteed but as time went by the guaranteed amount increased in a somewhat irregular way until on my birthday in 2017 it exceeded the amount of my pension (which is fixed).  My pension plan was (and remains) in pretty good shape so I wasn't all that worried that it wasn't completely guaranteed.  Still you never know what the future will bring so it is nice that it is now 100% covered.

The PBGC maximum monthly guarantee tables can be found here.  Note there are some additional limitations (none of which apply to me) that can reduce these amounts.