PBGC Guarantee for Multiemployer Plan
Hello everyone! Great, informative forum; glad I found you!
I'm helping my parents prep for retirement, and we're having trouble with planning when to start drawing the pension. In particular, we're not sure how to take into accound benefits should my father's multiemployer plan fail. Perhaps someone may be able to answer a few questions or point us in the right direction.
In a nutshell (with generic numbers):
Current pension: $2,000 at age 65 (currently age 61)
Current available pension: $1,300
PBGC guaranteed max: $1,300 (based on years of service & accrual calc)
The plan has serious funding issues, and we're pretty sure it's not going to last. Only 1 or 2 employers still paying in, there's no way they are going to continue to support the large (and growing) retiree base.
The question: If my father retires early and takes the $1,300, is that amount fully guaranteed if the plan fails?
There is far less info available for multiemployer plans. Our concern is that he takes the money now, the plan fails in a few years, and then the $1,300 is reduced by some early retirement percentage. I don't think that's the case, but I can't find anything that explicitely says what would happen under that scenario. If he takes the $$ now, it's basically a bet that the plan fails within the next 12 years (the breakeven calc using his actual #'s). But if the early retirement amount would be reduced after the plan fails that would change everything. I know that's not the case under single employer plans, but the calculations are very different under multiemployer plans and the answer isn't clear.
I'll continue to look & will follow up if I find a solid answer in case anyone else finds themself in this situation in the future. If anyone is interested, I'll also post what I can find on multiemployer plans. I would expect more interest as unions (and the multipayer plans) continue fail.
Thank you very much for your help.