One of our members wrote a letter to the PBGC in February 2005, asking what the effect of the PBGC taking over the Lucent pension plan would be. The Letter and the PBGC reply are shown below:

To The PBGC:
I retired at age 60 with a pension reduced for being under age 65 at retirement.  My present reduced pension benefit is far in excess of the 2005 PBGC maximum benefit of $45,613.68 per year.  
I am now age 70.  The pension plan is covered by PBGC insurance.   IF  the plan terminates, will my PBGC benefit be reduced from the PBGC maximum because I retired at age 60, or will I be eligible for the maximum because I am at least 65 IF / when the plan terminates ? 
Please advise and thank you.

Reply from the PBGC:

...... you would be eligible for the maximum benefit that PBGC pays at age 70, the age that PBGC would start paying your benefit in the scenario you present below.  At age 70, the maximum guarantee for a single life annuity with no survivor benefits is $75,718.68 per year. The maximum is lower if your benefit is paid in a form other than a single life annuity, such as a form that provides for survivor benefits. In addition, if you own more than 10% of the business, or if your plan provides supplemental benefits, such as temporary payments, PBGC's guarantee may be reduced.  



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