The Pension Benefit Guaranty Corp. announced Wednesday that the maximum benefit retirees can receive from the agency will increase by $2,000 in 2012, to $55,841.
The increase is the first since 2009.
For the past three years, the PBGC’s yearly maximum benefit for a 65-year-old retiree has been $54,000. More than 85% of the retirees in their system receive the full amount of their promised benefit, the PBGC noted in a release.
The new rate will apply for plans that terminate in 2012, even if the retiree does not begin collecting benefits until later years. For terminated plans, the trigger date is when the bankruptcy started, not when the plan ended.
Benefit payments are based on a formula prescribed by federal law. Maximum amounts are increased when the Social Security wage base goes up. That wage base will be raised to $110,000 for 2012, up from $106,800. People who retire earlier or choose survivor benefits will get lower amounts.
Agency spokesman Marc Hopkins said the benefit increase does not change the projected $24 billion deficit in the PBGC’s single-employer program and $9.4 billion shortfall in the multiemployer program by 2020, according to the agency’s Nov. 10 report. In fiscal year 2011 ended Sept. 30, the PBGC had a record $26 billion deficit, a 13% increase over the previous year.