PBGC: The Blog
Welcome to our Blog
Thanks for visiting PBGC’s brand-new blog.
First, we know some of you are asking: Why does PBGC need a blog?
Well, our mission is to protect pensions, and we’re proud of the job we do.
Elsewhere on this website you’ll find tons of information about all aspects of the agency’s work. Important information—often technical, sometimes complicated.
But on this blog, we want to keep it simple.
Here, our communications team will tell PBGC’s story in a conversational way, zeroing in on how we protect retirement security.
We’ll tell you how we work with employers and employees to preserve pension plans. How we make sure retirees get their pensions when companies can’t keep their promises. How we promote our mission to strengthen retirement security.
In addition, we’ll link to the most relevant facts, figures, news stories, and videos about the world of pensions and retirement security. And from time to time we’ll show you the human side of PBGC, by sharing the observations of Director Josh Gotbaum, our in-house pension experts and other members of our staff.
So, welcome, and let’s get down to business.
See the string of messages on the right side of this blog page? That’s PBGC’s Twitter feed.
We use Twitter to spotlight our day-to-day efforts to protect pensions. When you sign up, you’ll get quick bits of information to keep you in the know about PBGC. And each day you’ll learn a new fact about pensions and retirement security.
If you’re among the 1.5 million Americans who rely on PBGC for monthly income, you’ll be first to get a link to your retiree newsletter.
If you work in the pension field, we’ll send you our monthly interest rates, premium filing updates and news of important regulatory changes.
If you like one of our tweets and want to share it with friends, please retweet it. Help us spread the word as we work to save America’s pensions.
Follow us at http://twitter.com/#!/USPBGC
We’ve got a couple of good reasons to be proud these days. First, PBGC people opened their hearts and wallets to again exceed the agency’s goal in the recent Combined Federal Campaign. More than $257,000 was raised for more than 4,000 local, national and international charities. Second, the video that promoted the campaign was one of two honored for excellence among all federal agencies.
You can view the winning video: PBGC Video on YouTube.
PBGC wants pensions to continue whenever possible. We recently helped A&P exit bankruptcy, while keeping pensions for its 26,000 employees. Here's what we had to say: PBGC: A&P Preserves Single-Employer Pensions in Chapter 11.
Defined benefit pensions provide lifetime retirement security, but need to be updated for today’s workforce. PBGC Director Josh Gotbaum talked about his ideas at a recent forum sponsored by Institutional Investor magazine. Here’s a March 20 report from the magazine’s Investor Intelligence Network website:
Pension Plans Need Freedom to Try New Things, Says PBGC Director
PBGC Director Joshua Gotbaum, speaking during a recent Institutional Investor panel session forecasting the future of America's retirement system (cloudy with a chance of crisis), urged industry members, legislators and fellow regulators to help create an environment in which plan sponsors are free to experiment with new kinds of plans.
- DB offers real advantages, but the requirements are so cumbersome that many employers are choosing to just not deal with them. "It feels like we are contracting our options not expanding them," Gotbaum said. "Even at this late date we can still do things to help companies to preserve their DB plans and experiment with DB-type plans. We need to make it easier for DB."
The retirement industry too long has been content with a product offering framework that emphasizes individual accounts and mutual funds – and has not sufficiently pushed for more pooling of assets, either for a single employer or other form of group, to bring costs down, Gotbaum said.
Remember elementary school, and lining up on risers once a year for the class picture?
Most of us never gave a second thought to the photographer, or the folks back in the lab who processed and printed all those photos.
Well, while we were squirming and thinking of recess, they were hard at work. Making a living and building up a pension for their retirement years.
If they worked for Olan Mills, one of the biggest names in commercial photography, they won’t lose that pension.
The rise of digital photography and the Great Recession of 2008 put a heavy strain on Olan Mills, and the company began the process of reorganization. PBGC worked with Olan Mills to keep the pensions going, but last year the company’s assets were sold to a buyer who didn’t take on the pension plan. So PBGC stepped in to assume responsibility.
The Olan Mills pension plan covers about 4,300 people. Retirees now are getting their checks from PBGC, every month and on time. The other employees will get their benefit from us when they reach retirement age. They join 1.5 million Americans who count on PBGC for their retirement income.
For more info, see the Olan Mills pension plan page.
As Josh Gotbaum pointed out in a recent Newsday op-ed, Americans are living longer and need to prepare for longer retirements.
Social Security also has to get ready.
As reported by US News, here are some data points relevant to Social Security’s finances:
- In 1940, a 65-year-old could expect to live an additional 12 or 13 years. A 65-year-old today can expect to live another 20 years, and thus collect benefits for longer periods.
- The drop in birthrates and the increase in life expectancies have reduced the number of workers per beneficiary to 2.8; by 2036, the ratio will be 2.1 workers for each beneficiary.
A court decision this week will help PBGC keep employers accountable for pension plans, even when the employer is foreign-owned.
In 2007 Japanese company Asahi Tec bought Metaldyne, a Michigan auto parts maker. When Metaldyne went bankrupt in 2009, we asked Asahi Tec to step up and assume the pensions of Metaldyne’s 10,000 workers and retirees. Asahi Tec refused.
To protect Metaldyne retirees, we moved right away to become trustee of the pension plan.
And to get Asahi Tec to meet its responsibilities, we took the matter to court. Asahi Tec sought to dismiss the case, claiming that PBGC did not have jurisdiction over the Japanese firm.
On March 14, a U.S. District Court threw out Asahi Tec’s motion to dismiss. Judge Amy Berman Jackson noted that the company had already acknowledged U.S. jurisdiction in another case. And that Asahi Tec understood it was responsible for the pensions when it bought Metaldyne. “There is no question that the foreign company not only acquired a U.S. subsidiary but that it did so with its eyes wide open,” she wrote. Read the judge’s decision on our Legal Filings and Decisions page.
The way is now clear for PBGC to pursue the case on behalf of Metaldyne’s retirees.
Want to see more? View the archive of all posts to PBGC: The Blog.