Social Security benefits payable in 2021 will increase by 1.3%, the Social Security Administration (SSA) announced Oct. 13 in updates that include the 2021 taxable wage base and the 2019 national average wage. The Pension Benefit Guaranty Corp. (PBGC) likewise has released inflation-indexed premium amounts for next year and the maximum guaranteed benefit for single-employer pension plans.
PBGC is expected to publish the 2021 present value of the maximum guarantee table in late October or early November, but Mercer has projected these amounts. These values are used to administer Internal Revenue Code Section 436 restrictions on lump sums and other accelerated payments from underfunded plans.
IRS has yet to issue 2021 covered compensation, but Mercer has projected those figures, using the published taxable wage base. Qualified defined benefit pension plans use covered compensation to determine “permitted disparity” under Section 401(l) design-based safe harbor rules and “imputed disparity” under Section 401(a)(4) general nondiscrimination testing rules.
Download the print-friendly PDF for the complete article with tables showing 2019-2021 Social Security and PBGC official amounts, along with Mercer’s projections of other key figures.