10-4-09: PBGC Payment Initiation and Overpayment Recovery
- Published: Sunday, 04 October 2009 13:09
Answers to Questions about PBGC Payment Initiation and Overpayment Recovery:
Here are recent answers from the PBGC regarding estimates and overpayments:
WHEN WILL WE START RECEIVING ESTIMATED ANNUITY PAYMENTS FROM THE PBGC?
- The PBGC expects to assume responsibility from Fidelity for making payments to current retirees by January 1, 2010.
- The PBGC will adjust current retirees payments to estimated guaranteed levels approximately February/March, 2010.
WHEN AND HOW WILL I HAVE TO PAY BACK OVERPAYMENTS IF NECESSARY?
- Overpayments are accumulated as of our termination date, July 31, 2009.
- The collection process will not start until final benefit determinations are issued from the PBGC which, could take three to four years from now.
- Overpayments are interest free and typically done by reducing your monthly benefit by a fixed percentage. This percentage is based on what is owed and the value of your annuity (examples to follow at a later date). The collection percentage could be as low as 3% of your monthly gross annuity however, not to exceed 10%. Once the overpayment has been repaid, your monthly benefit is restored to the amount of the final benefit determination.
- If the retiree should die during the payback period the surviving spouse is responsible to assume the liability at the same amount determined prior to the retirees death. If the surviving spouse were to die prior to full payment the PBGC will NOT collect unpaid funds from the estate.