PBGC runs two insurance programs that safeguard retirement benefits in different ways.
Lately, you may have heard about multiemployer plans and the financial troubles that some of them are having as described in our Projections Report. Currently, PBGC insures more than 10 million workers and retirees in about 1,400 multiemployer plans.
PBGC doesn't take responsibility for multiemployer plans; instead, we send financial assistance to plans that have run out of money to pay promised benefits. During FY 2013, PBGC paid $89 million in financial assistance to 44 multiemployer pension plans covering the benefits of nearly 50,000 retirees. An additional 21,000 people in these plans will receive benefits when they retire.
The news isn't good for 1.5 million people across the country in a swath of multiemployer plans. According to PBGC's Projections Report, released last week, these plans are likely to fail putting the retirement benefits of current and future employees in jeopardy. Not only that, but if those plans fail it may bring down the entire system and with it the retirement security of the 10 million people within it.
Right now, there are more than 10 million people and their families covered by about 1,400 multiemployer plans in industries like construction, mining, supermarkets, transportation, and hospitality. Massive losses during the economic slowdown in 2008-2009, left many plans seriously underfunded. The economy has improved significantly, but for the plans most in trouble, the improved economy was not enough. These plans responded by increasing contributions and reducing future benefits but it still wasn't enough.
Despite substantial economic and market gains, multiemployer pension plans covering about 1.5 million people are severely underfunded, threatening benefit cuts for current and future retirees, according to the FY 2013 Projections Report released today by the Pension Benefit Guaranty Corporation. By comparison, the financial situation for private single-employer plans, which cover about 30 million participants, is projected to improve.
As required by the Employee Retirement Income Security Act, PBGC annually provides an actuarial evaluation of its future expected operations and financial status. The FY 2013 Projections Report (formerly called the "Exposure Report") released today provides a range of estimates of the future status of private pension plans and their effect on PBGC's financial condition, drawn from hundreds of economic scenarios.
If PBGC is responsible for your pension benefit, the easiest way to transact business with us is through MyPBA, our secure online service.
MyPBA is fast, free, and available to you 24 hours a day, seven days a week. Your online transactions are safe and confidential. You can change your address, sign up for direct deposit, designate your beneficiary, print out your IRS Form 1099-R, and view your payment information.
If you're a participant in a National Steel pension plan, you may have received a communication claiming that PBGC is conducting a general review of the benefit amounts paid to National Steel participants.
Please be assured that this is not the case. PBGC did not send out any such communication, and is not reviewing National Steel benefits.
We are confident that your pension benefit has been determined accurately and that you are receiving the maximum amount you are entitled to under law.
If you have any questions or receive additional false information purporting to come from PBGC, please feel free to contact us at email@example.com or 1-800-400-7242.
In part one of a two-part series, "Insuring Private Pensions," Fox Business reporter Adam Shapiro and Pension Benefit Guaranty Corporation Director Josh Gotbaum, discuss the need for Congress to raise premiums to ensure 42 million Americans receive the pensions they were promised.
By now, you may have read news headlines addressing a study on PBGC premium increases released by the Pension Coalition. In an official PBGC statement, Gotbaum responded saying, "Unlike the FDIC and other Federal insurance programs, Congress has continued to set PBGC premiums and has done so in ways that both underfunds PBGC and is convincing some companies they shouldn't offer pensions at all."
In his interview, Gotbaum explains the specific PBGC-related issues that affect the retirement crisis.
Watch the complete video interview on the Fox Business website.