This entry is part of a series of blog posts that looks back and commemorates the agency's work.
We hit the "Door" running
We had no time to hang photos, adjust chairs or figure out how to dial long distance. Visualize the rush on department store doors on Black Friday — well, that was much like what greeted us when we opened our doors for the first time in Silver Spring, Md., in 1974.
More than 200 urgent cases waited for us before the first pot of coffee was brewed.
Two days later our Board met for the first time and 21 days later we mailed our first premium forms. And it has not slowed since.
Initial annual premiums were $1 per plan participant in the single-employer program and 50 cents per participant in the multiemployer program. Thus began our march together with workers and employers seeking to preserve pension security for hard-working Americans.
When President Ford signed the Employee Retirement Income Security Act (ERISA) on Sept. 2, 1974, which included creation of PBGC, he gave us our charge: "Today, with great pleasure, I am signing into law a landmark measure that may finally give the American worker solid protection in his pension plan," Ford said.
"May" is the word we looked at hard and carefully. In a sense, we want to make the impact of that word as minimal as possible and — ideally — change "may" to "will."
We are not there yet.
Robert E. Nagle, who served as PBGC's executive director from 1979-1982, died on Saturday, Aug. 16, 2014, at his home in McLean, Va., at the age of 84. Nagle was appointed executive director by President Carter in 1979 and continued in the position under President Reagan until 1982.
During Nagle's tenure as executive director, he was best known for restructuring the agency's multiemployer insurance program, following the passage of the Multiemployer Pension Plan Amendments Act of 1980. He also worked to prevent the termination insurance program from being used to finance ongoing pension plans.
From 1971-1974, Nagle served as general counsel of the Senate Committee on Labor and Public Welfare, and was instrumental in drafting legislation that was enacted as the Employee Retirement Income Security Act of 1974.
For his commitment to retirement security, Nagle was presented the Jacob Javits Award for Outstanding Contribution to Retirement Security. The award recognized individual efforts that significantly contributed to advancing the private defined benefit pension system.
After his tenure as PBGC's executive director, Nagle was an arbitrator and mediator in employee benefits and labor disputes. As a lawyer in private practice, he also focused on employee benefits issues.
Nagle studied law at Georgetown University Law Center and the University of Chicago Law School. He also studied at Wesleyan University, where he received a bachelor's degree.
We recently created an online resource that provides information to assist with "Making a Choice: Lump Sum or Annuity?"
Many people with a retirement plan face the decision of choosing between an annuity and a lump sum payment to fund their day-to-day life after they stop working. An annuity provides a lifetime steady stream of income whereas a lump sum is a one-time payment.
The new resource page allows you to get some insight on key questions (click on the question for the answer) that should be answered when making this important decision and offers other hypothetical scenarios you may face.
You can also share this new page on our site by using the share icons at the bottom.
PBGC will pay retirement benefits for 2,101 people covered by the APL/NVF Consolidated Pension Plan, which is sponsored by the estate of businessman Victor Posner. The estate has interests in about 40 entities that mostly focus on real estate development in Florida, Pennsylvania, and Maryland.
The agency is stepping in because the assets of the Posner estate are being distributed by a Florida Probate Court, and the pension plan will be abandoned. The APL/NVF Consolidated Pension Plan will end as of July 31, 2014.
PBGC will pay all pension benefits earned by the plan's retirees up to the legal limit of about $59,320 a year 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.
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.