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.
A new AARP survey shows that health care, education, financial security and the digital divide are among the most important social issues for African-Americans ages 50 and older.
The national survey, which included phone interviews with 650 respondents, demonstrates that while many older African-Americans are optimistic that the country is moving in the right direction when it comes to issues such as health care, education and the digital divide, they are significantly less optimistic about finances, employment and workforce discrimination. Lower levels of optimism related to finances and employment could directly impact their future retirement security.
Having a financially secure retirement was considered the second most important issue (cited by 16% of those with multiple answers), while access to high quality education was the third most important issue (cited by 14% of those with multiple answers).
Complete survey results can be viewed on the AARP website.
In part two of the Fox Business two-part series "Nationwide Retirement Crisis," PBGC Director Josh Gotbaum says millions of Americans have no retirement savings, calling the issue a national crisis.
In his interview, Gotbaum addressed issues concerning the existing retirement system, including:
- The existing retirement system is not covering most people,
- It doesn't lead to enough saving,
- And it doesn't lead to lifetime income.
People are living longer, healthier lives, which means retirement will cost more.
Watch the complete video interview on the Fox Business website.
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 firstname.lastname@example.org or 1-800-400-7242.
PBGC will pay retirement benefits for more than 1,400 current and future retirees of Interfaith Medical Center, which operates a 287-bed hospital in Brooklyn, N.Y.
The agency stepped in because Interfaith Medical is unable to meet the minimum funding requirements for the two pension plans it sponsors.
PBGC will pay all pension benefits earned by Interfaith Medical's retirees up to the legal limit of about $55,840 for a 65-year-old.
Retirees will continue to get benefits without interruption, and future retirees can apply for benefits as soon as they are eligible.