Clear Money Guide
What this guide covers
A quick view of the questions and evidence developed below.
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Updated July 30, 2026. Quick answer: A single-employer plan that fails is taken over by the Pension Benefit Guaranty Corporation, which pays benefits up to a maximum set by law under section 4022 of ERISA. The maximum is age-indexed — the reduction for starting before 65 is already inside the figure — and for most participants it sits well above the benefit actually earned. Whether the cap binds you is a one-line comparison, and it is worth doing before you treat plan failure as a reason to take the lump sum.
The 2026 maximum monthly guarantee, at four ages
| Age benefits begin | Straight-life annuity | Joint and 50% survivor annuity |
|---|---|---|
| 65 | $7,789.77 | $7,010.79 |
| 62 | $6,153.92 | $5,538.53 |
| 60 | $5,063.35 | $4,557.02 |
| 55 | $3,505.40 | $3,154.86 |
PBGC’s published maximum monthly guarantee table for 2026. The full table runs from age 45 to age 75; four rows are shown here. PBGC’s own note on the joint and survivor column: “Joint and 50% survivor annuity amounts apply only if both spouses are the same age.”
The reduction for early commencement is already in the row. This is the single most misread thing about the table. The age-55 figure is not the age-65 figure with something still to be subtracted — it is the maximum for a benefit that begins at 55. Compare your own benefit against the row for the age you will actually start, and the comparison is done.
Doing the comparison, in one step
Take the monthly benefit your plan has quoted, in the form you would elect, and read it against the row for the age you would start. If your benefit is below that figure, the guarantee cap is not the thing standing between you and your pension, and “what if the company fails” is a weaker argument for the lump sum than it feels like. If your benefit is above it, you have found a genuinely quantified risk — and it is quantified in dollars per month, which is the only form in which it can be weighed against anything else.
What the table does not cover, and you should not assume either way. These figures are the statutory maximum for a single-employer plan. They are set by law and adjusted, and the amount that applies to a given participant is fixed by reference to the plan’s termination. Multiemployer plans are guaranteed under a different structure with different limits, which this page does not state. And benefit improvements adopted shortly before a termination may not be fully guaranteed. If your benefit is anywhere near the relevant row, those details stop being footnotes — take them to PBGC’s own published guidance and to an adviser who will read your plan document.
Coordinate this with the rest of your retirement plan
A pension election is usually a one-time choice you cannot revisit, and an adviser can weigh it against your other income, your spouse’s position and how long the money has to last, though that does not replace the numbers in your own plan documents.
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Where this figure shows up again
The same guarantee is load-bearing inside the Code. IRC §436(d)(3)(A)(ii) caps a restricted payment from a plan funded between 60 and 80 percent at the lesser of half the payment or “the present value … of the maximum guarantee with respect to the participant under section 4022 of the Employee Retirement Income Security Act of 1974.” So the number above is both your downside if the plan fails and, in a partially funded plan, part of the ceiling on what you can take out — the restriction is explained here.
The honest summary: plan failure is a real risk and it is an insured one, which makes it unusual among retirement risks. Treat it as a number to check rather than a fear to act on.
Sources
Pension Benefit Guaranty Corporation, maximum monthly guarantee table for 2026, pbgc.gov, retrieved July 2026; IRC §436(d)(3)(A)(ii) and section 4022 of the Employee Retirement Income Security Act of 1974 for the guarantee the table states.
This states what the cited authority says. It is not tax, legal or investment advice. A pension election turns on your own plan document, your own health and marital situation, and figures your plan must give you in writing — and this site states no interest rate, no conversion factor and no break-even age, because every one of those is specific to your plan and a borrowed number is worse than none.
Related
Guides › Pension and Annuity Decisions
The life-insurance side works differently and is run by the states, not by a federal corporation — what your state guaranty association covers if your life insurer fails, where the $300,000 figure everyone repeats is wrong in twenty-one jurisdictions.