The federal agency that insures private pension plans for millions of Americans announced Tuesday that the maximum annual benefit for plans taken over next year will be $49,500 for workers who wait until 65 to retire. 

The figure represents a 3.9 percent increase from $47,659, which is this year's maximum annual benefit for those who wait until 65 to retire. 

Workers who retire before they are 65 get smaller benefits, while those who work longer get larger benefits, said the Pension Benefit Guaranty Corp. 

The benefit figure is arrived at each year based on a formula set in law that takes into account such factors as growth in the benefit base. 

The maximum annual pension of $49,500 next year for someone retiring at 65 translates into a maximum monthly payment of $4,125, the agency said. 

The PBGC insures pensions for 44 million workers and retirees. 

It was created in 1974 as a government insurance program for traditional, defined benefit pension plans. Those plans give retirees a fixed monthly amount based on salary and years of employment. Companies that sponsor these traditional pension plans pay insurance premiums to the agency. If a company cannot support its pension obligations, the agency takes over the plan and pays promised benefits up to certain limits. 

More than 90 percent of the participants in pension plans taken over by the PBGC face no reduction in benefits due to the legal limits set on coverage, according to analysis done by the agency. 

The PBGC logged a deficit of $18.1 billion this year, an improvement from last year, thanks to a new pension law designed to help shore up the nation's troubled pension system. Supporters hope the changes will help prevent a multibillion-dollar taxpayer bailout of the agency. 

In recent years, an explosion of ailing companies have jettisoned their pension liabilities to the PBGC. The problem has been especially pronounced in industries such as steel and the airlines, which are heavily unionized. 

In addition to insurance premiums paid by companies, PBGC's operations are financed by money it earns from investments and funds from pension plans it takes over. The agency is not financed through tax revenues.