Lump Sum vs. Annuity Pension

[zaqxsw]

With the shift in interest rates and the new laws being phased in tieing lump sum calculations to a modified corp. bond rate instead of just the treasury rate, I'm toying with taking a pension as an annuity.

My concern is if my company later defaults on it's pension and the government has to pick it up. I have studied the PBGC maximum coverage and have a question about the age scale they use. Is the maximum listed based on the age you retired at, or is it based on your age when your plan defaulted, if you are already retired?

Thanks for any replies!

 

[MasterBlaster]

Per the PBGC website, The maximum monthly guaranty tables suggest that is is your age when the PBGC starts funding your pension, not how old you were when the original pension started.

Here's a quote from their webpage:

The maximum guarantee is set by law for the year in which your plan ended. The amount you receive from PBGC will be based, in part, on your age at the date you begin receiving benefits from PBGC

here's a link to their table and discussion:

http://www.pbgc.gov/workers-retirees/find-your-pension-plan/content/page789.html

 

[zaqxsw]

Thanks for the quick reply MasterBlaster!

 

[donheff]

Per the PBGC website, The maximum monthly guaranty tables suggest that is is your age when the PBGC starts funding your pension...
here's a link to their table and discussion:
http://www.pbgc.gov/workers-retirees/find-your-pension-plan/content/page789.html

Wow, the PBGC really sticks it to ERs. You need some kind of bankruptcy insurance to carry you to 65 .