The Pension Benefit Guaranty Corporation (PBGC) has updated its maximum monthly benefit guarantees for 2024 in a table published on its website.
For instance, a 65-year old pension opting for a straight- life annuity for 2024 could expect a monthly maximum of $7,107.95. The PBGC maximum guarantee is determined using a formula in federal law tied to the Social Security index. The formula provides lower amounts for younger ages because younger people are expected to receive more monthly pension checks over their lifetime. Conversely, amounts are higher for older ages. In addition, amounts are lower for retirees who choose an annuity with survivor benefits.
2023 Forms 5500 Released
Simultaneously, the U.S. Department of Labor’s Employee Benefits Security Administration, the IRS and the Pension Benefit Guaranty Corporation recently released informational copies of the 2023 Form 5500, Form 5500-SF, IRS Form 5500-EZ, IRS Form 5558 and their related instructions online. The IRS released paper copies of the 2023 Form 5500-EZ and its instructions separately online.
The “Changes to Note” section of the 2023 instructions for each of the forms highlights important modifications to the forms, schedules and instructions. The Form 5500 and Form 5500-SF Changes to Note sections include changes related to the following:
A new Schedule DCG for defined contribution group reporting arrangements,
A new Schedule MEP for multiple-employer pension plans,
Revised small plan audit participant count method,
Improved Schedule H administrative expense transparency,
Schedule MB regarding asset reporting for plans receiving special financial assistance,
Schedule R tax compliance questions and revisions to asset allocation reporting and
Schedule SB target normal cost reporting clarifications.
Read a fact sheet with details on the 2023 changes.
Navigating the intricate landscape of pension benefits requires staying abreast of updates and understanding their implications. Whether it's the PBGC's Maximum Benefit Limits or the revisions in the 2023 Forms 5500, these developments underscore the importance of proactive awareness and strategic planning. As you consider the impact on your retirement strategy, consulting with a Trusted Advisor can help provide you with personalized insights tailored to your unique circumstances.
Sources:
PBGC (2023, October 17). Maximum Monthly Guarantee Tables. Pension Benefit Guaranty Corporation. https://www.pbgc.gov/wr/benefits/guaranteed-benefits/maximum-guarantee
U.S. Department of Labor (n.d.). Form 5500 Series. DOL. https://www.dol.gov/agencies/ebsa/employers-and-advisers/plan-administration-and-compliance/reporting-and-filing/form-5500