Your Benefit, Your Choice (706)

Your Benefit, Your Choice • Benefit Options from PBGC

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706 ver (2/2023)

Before you begin to receive your monthly pension benefit from PBGC, you have an important decision to make:
How do you wish to receive your monthly benefit?
This question is complex and could be one of the most important financial decisions you will ever make. Your
decision affects the amount of your monthly benefit and how much your beneficiary will receive after your death.
The best option for you depends on your age, health, and other financial resources, as well as the age, health, and
financial needs of anyone for whom you wish to provide a benefit. If you are married, you should discuss this
choice with your spouse. You may also want to discuss this choice with other family members or friends and,
possibly, a financial advisor. The following information is designed to help you make an informed choice.
You may choose the plan’s “automatic” benefit form or one of the PBGC optional benefit forms, described below.
The plan’s “automatic” benefit form is the benefit form the plan would pay you if you do not make an election.
Your automatic benefit form may be the same as one of the PBGC optional benefit forms.
PBGC OPTIONAL BENEFIT FORMS
This section describes each of the benefit forms that PBGC offers you, with examples using a payee named Sam
who is applying for a benefit at age 65. We show what Sam and his beneficiary Carol would receive under each
benefit form.
Straight-Life Annuity
A straight-life annuity provides a fixed monthly benefit for the rest of your life only. No survivor benefit will be paid
upon your death.
Example: Sam elects a straight-life annuity, and he receives $500 a month for the rest of his life. No one
receives any benefits after Sam dies.
Certain-and-Continuous Annuities
A certain-and-continuous annuity provides a benefit for the rest of your life at an amount reduced from the straightlife benefit amount. If you die within 5, 10 or 15 years after the date your benefits are first payable (the Annuity
Starting (ASD) you choose on your benefit application in item 1) your designated beneficiary will receive the
benefit for the remainder of that “certain” period. If you die after the certain period, no survivor benefit is payable.
You may choose any beneficiary for your certain-and-continuous annuity, such as your spouse, another person,
an estate, a trust, a church or other organization, etc. You can change this beneficiary designation at any time. If
your beneficiary dies before you and before the end of the certain period, you should designate a new beneficiary.
The amount of your benefit is the same regardless of whom you designate as beneficiary.
Examples:
▪ 5-year Certain-and-Continuous Annuity: Sam receives $494 a month for the rest of his life. If Sam dies
within five years of his ASD, Carol receives $494 a month for the remainder of the five-year period. If
Sam dies after the 5 year period, Carol does not receive any benefits.
▪

10-year Certain-and-Continuous Annuity: Sam receives $477 for the rest of his life. If Sam dies within
ten years of his ASD, Carol receives $477 a month for the remainder of the ten-year period. If Sam
dies after the 10 year period, Carol does not receive any benefits.

▪

15-year Certain-and-Continuous Annuity: Sam receives $452 a month for the rest of his life. If Sam
dies within 15 years of his ASD, Carol receives $452 a month for the remainder of the 15-year period.
If Sam dies after 15 year period, Carol does not receive any benefits.

Your Benefit, Your Choice • Benefit Options from PBGC (continued)

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706

SUMMARY OF EXAMPLES
Benefit Form
A. The form your plan
would pay you
automatically, if different
from below
B. 5-year Certain-andContinuous Annuity
C. 10-year Certain-andContinuous Annuity

Sam’s
Benefit

Carol’s
Benefit

Additional Explanation

Benefit amounts depend on benefit form payable under the plan.
$494

$477

$494

$477

If Sam dies before the end of the 5-year, 10-year, or
15-year certain period (whichever he chooses), Carol
will receive benefits for the remainder of that period.
If Sam dies after the end of the certain period, Carol
will not receive any benefits.

D. 15-year Certain-andContinuous Annuity

$452

E. Straight Life Annuity

$500

$452
The certain period starts on the ASD chosen.

None

Carol will not receive any benefits after Sam’s death.