The month of May is declared as Older Americans Month! Sponsored by the U.S. Administration on Aging, this year's theme is "Unleash the Power of Age."
In President Obama's proclamation of this month of recognition, he noted, "As older Americans strive to lift up their neighborhoods, my Administration is working to make sure they get the tools they need to make a difference."
One of those tools that aid older Americans in being able to "unleash the power of age" and thrive after retiring from years of service is the ability to collect the monthly pension check they've earned.
The Pension Benefit Guaranty Corporation protects the retirement incomes of more than 44 million American workers. Eighty-five percent of retirees who receive benefits from PBGC receive the full amount of the promised benefit.
That's what makes the work of PBGC important — we're working to preserve pension plans and to make new plans possible for coming generations of older Americans, too.
As the days of the month pass, stay tuned for more from PBGC as we recognize and honor the contributions of older Americans!
In the meantime, we'd like to share a video about how PBGC works to protect pensions.
Many companies still offer pensions — and with them, retirement income that you can't outlive. Generation Xers and Millennials with in-demand skills can target jobs with pension plans — but what's the fallback?
Too many don't know. If we filled a room with all of Generation X and Y, and then separated the room in half, less than half of the people on one side of the room would have made saving for their retirement a top priority, according to research from LIMRA, a research, consulting and professional development organization for insurance and financial services companies.
PBGC protects pensions. So, what is a pension? To most people, a pension is a retirement arrangement in which your employer promises you a regular payment from the day you retire, for as long as you live. The amount of your pension usually depends on how long you worked for an employer and your salary with that employer. Ask a retiree, "What is a pension?" and they may say,
"A pension is the $400 per month I receive for my many years of service at Acme Widgets. My pension helps to supplement the $600 per month I receive from Social Security and my retirement savings."
Normally, employees must work for an employer for a certain time period before the benefits they have earned belong to them. After they have done so, they are considered "vested" in those benefits. Today, in some pension plans, you are fully vested after five years on the job. In others, it takes you seven years to become fully vested - but you become vested in increasing portions of your benefit starting at three years. If you've worked for more than one company long enough to become vested in multiple pension plans, you can receive more than one pension payment.
PBGC will pay retirement benefits for more than 200 current and future retirees of Bill Johnson's Restaurants Inc. The eatery has five locations throughout Arizona.
The agency is stepping in because the pension plan doesn't have enough money to pay benefits when due. Also, Bill Johnson's is attempting to reorganize in bankruptcy proceedings and will likely abandon the plan when the case concludes leaving no one to administer benefits.
The restaurant chain operates under the Bill Johnson's Big Apple brand, and its retirement plan, the Defined Benefit Plan of Bill Johnson's Restaurants Inc., will end as of April 4, 2013.
PBGC will pay all pension benefits earned by the company's retirees up to the legal limit of about $57,500 a year for a 65-year-old.
There isn't any doubt that the economy has taken a big hit in recent years.
As the housing market begins to rebound and the stock market hits a new high, the percentage of Americans who are confident that they will have enough money for a comfortable retirement is the lowest it has been in 23 years.
According to the latest Retirement Confidence Survey by the Employee Benefit Research Institute (EBRI) only 13 percent were very confident of having a comfortable retirement, while 38 percent were somewhat confident, 21 percent not too confident, and 28 percent not at all confident.
Some of the biggest factors influencing the drop in confidence are high debt levels, and uncertainty about employment.
Read the 2013 EBRI Retirement Confidence Survey Results.