Defined Benefit plans covered by Pension Benefit Guaranty Corporation insurance program
| What defined benefit plan benefits are covered by the Pension Benefit Guaranty Corporation insurance program? |
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Only vested benefits are insured. Any benefit which has been earned but not yet vested is not covered. Moreover, a maximum pension benefit is provided - inflation indexed by reference to the Social Security contribution and benefit formula - which is actuarially reduced if the benefit begins before a participant's age 65. In short, a plan participant whose monthly benefit exceeds the limitation remains at risk for the excess when the plan defaults and the employer is insolvent. |
