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PBGC Blog: Retirement Matters

There are a number of websites and online tools to help with retirement planning.  In particular, retirement calculators are one of the most useful tools in helping future retirees figure out how much to save for retirement. Although this tool, in its many variations, can be extremely helpful, very few actually provide detailed instructions on how best to use them. Fortunately, CBSNEWS.COM features Steve Vernon's tips on using retirement calculators:

  • Tip #1: What rate of return do you expect on your retirement savings?
  • Tip #2: When do you expect to retire?
  • Tip #3: How long will you live?
  • Tip #4: How much retirement income do you need?
  • Tip #5: Should you include Social Security benefits?

Read the CBSNEWS.COM full article:http://www.cbsnews.com/8301-505146_162-57494187/5-tips-for-using-retirement-calculators/.

 

One big job for PBGC is to make sure that companies with pension plans finance those plans and PBGC's safety net. The best outcome is always for a company to keep its own pension plans. But when it can't, we also fight in court to recover the money that the company owes for its pensions.

A recent case involved the Daytona Beach, Fla. News-Journal, a newspaper in receivership  meaning that a court ordered the sale of the paper. The business owed PBGC $15 million for pension benefits that the newspaper owed its employees but that PBGC is now paying.

But in court, another creditor made a claim for an amount greater than the value of the entire business, based on its former ownership of the company. A Florida court gave that claim priority  leaving PBGC and others out in the cold.

A PBGC staff attorney researched Florida law and found that the court had made an error. With that information PBGC successfully appealed the ruling. Florida law says that claims arising from debt get priority over claims arising from ownership. The appeal kept PBGC's claim alive and may yet enable PBGC to collect significant funds from the newspaper.

"The decision supports the general rule that debt comes before equity," said Chief Counsel Izzy Goldowitz, "so it's an important precedent."

Read the appeals court's full decision. [PDF]

 

On Wednesday the agency moved to end the Cinram Music Union Pension plan, which has some 280 participants and is about 53 percent funded, according to PBGC estimates.

We took this step because the company that sponsors the plan is about to sell the majority of its assets to a buyer that isn't assuming the pension plan.

The plan's sponsor, Cinram (U.S.) Holding's Inc., is involved in a Chapter 15 case in the U.S. Bankruptcy Court in Wilmington, Del., while its Toronto-based parent, Cinram International Inc., sought creditor protection under the Companies' Creditors Arrangement Act in a Canadian court. More...

In and around the hard-hit city of Detroit, PBGC is protecting the retirement of people making a difference.  The agency has stepped in to protect the retirement income of the nearly 1,600 employees of United Way for Southeastern Michigan.

While the pension plan is ending, the not-for-profit United Way for Southeastern Michigan is not. So, workers there can continue the non-profit's mission to improve communities and individual lives with the confidence that their pensions are safe.

The pension plan had a shortfall of about $23 million, which PBGC will make up from its insurance funds. Retirees will get their full benefit, up to the limits set by Congress ($54,000 a year for a 65-year-old).

If you're a member of the pension plan you will get a letter from us soon with more information. In the meantime, see the United Way for Southeastern Michigan plan page for more information.

According to a recent Prudential study, women are less confident about their retirement finances than their male counterparts. The study also highlighted the difference in level of confidence between women younger than 35 and those of the baby-boomer generation. It is believed that this confidence gap may reflect a gap of knowledge and experience.

An article from CBS Money Watch details the following tips women can take to boost their confidence about being prepared for the future.

1.       Go for retirement benefits

2.       Contribute to spousal IRA

3.       Inventory your retirement benefits

4.       Monitor and manage investments

Read the full article on CBSNews.com.

Alert! Don't pay a finders fee for your pension!

PBGC protects pensions. We also want to protect you!

Scams are at an all-time high during these tough economic times, and retirees are among scammers' favorite targets.  

We have just learned that an individual attempted to obtain a 25% "finder's fee" for helping a retired United Airlines flight attendant get her PBGC pension benefit. He, as well as others, may be doing this with other UAL flight attendants.

Let's be clear: You do not need anyone's assistance to obtain your benefit from PBGC. People or firms who offer to help you for a finder's fee are not associated with PBGC. If you have questions, contact us by email or call our Customer Contact Center at 1-800-400-7242.

Read the full fraud alert from the Inspector General.