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PBGC Blog: Retirement Matters

Ladies enjoying wine and each others company.

Every March we celebrate the profound impact women continue to have on American and world history. While Women's History Month is usually the designated time of year to robustly commemorate the contributions women have made to society, we also think it's a good time to take a look at the state of women's retirement security. After all, life after retirement is very important to "women's history."

First, let's be clear, the retirement picture is dismal for both men and women. But compared to men, women's retirement security is often less than adequate.

The United States Department of Labor reports married women tend to outlive their spouses by two years once they reach age 65 — that's two whole years of additional savings needed to cover the cost of living expenses that some do not factor in. Women also tend to take a more conservative approach when it comes to saving for retirement. Simply put, women do not invest in high-risk stocks because of the volatility of the stock market.

Another factor contributing to the bleak retirement outlook is women often delay saving for retirement. The Department of Labor also reports only 45 percent of the 62 million salaried women working in the United States contribute to a retirement plan.

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By now, you have probably received your Form 1099-R from us.

As you arrange to have your income taxes prepared and filed, we would like to share some important information about PBGC benefits and taxes.

While PBGC is required to withhold federal income tax, we do not withhold for state taxes. If your state has an income tax, you may owe tax on your PBGC benefit. To find out more, contact your state tax office (Excel file, 14.4 KB).

Also, if you receive a benefit from PBGC, we report the amount annually to the IRS.

For income tax purposes, each January PBGC sends you an IRS Form 1099-R that states the amount we paid you the previous year.

If you need a Form 1099-R for 2013 and haven't received it, PBGC will get you one.

The IRS has a tool, "Is My Pension or Annuity Payment Taxable?" that will help you determine if your pension or annuity payment from an employer-sponsored retirement plan is taxable.

States with the Highest Number of Unclaimed Pensions. New York (6,678/$40.33 million). Illinois (4,344/$85.36 million). California (2,966/$7.64 million). Texas (2,278/$10.68 million). New Jersey (2,114/$11.70 million). Ohio (1,908/$12.82 million).
The beginning of a new year typically means the onset of new goals and perhaps the continuation of last year's resolutions. For many, saving more money might always be #1 or a close second on that list.

One source of this year's extra savings could be money from an unclaimed pension.

Across the country, there are more than 31,000 people who haven't claimed pension benefits they are owed. Those unclaimed pensions are now north of $280 million, with individual benefits ranging from 12 cents to almost $1 million.

The states with the most missing pension participants and money to be claimed are:

  • New York (6,678/$40.33 million)
  • Illinois (4,344/$85.36 million)
  • California (2,966/$7.64 million)
  • Texas (2,278/$10.68 million)
  • New Jersey (2,114/$11.70 million)
  • Ohio (1,908/$12.82 million)

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PBGC works to ensure that people who get benefits from us receive them on time — by the first of the month. However, there's one time when that doesn't happen — the beginning of the year.

Typically, if the first of the month falls on a weekend or holiday, direct deposits will usually post before the first of the month. For this reason, June, September, and December 2013 direct deposits arrived before the first of the month. For tax purposes, January is the exception to this rule.

If payments arrived in December, it would result in a tax liability for 2013 instead of 2014. For this reason, your funds will be deposited on Jan. 2, 2014, one day after the New Year.

If you get a paper check (mailed on Dec. 27, 2013), and have not received it by January 7, please call us at 1-800-400-7242 or visit our Contact Us page for other options.

Want to receive future payments more quickly? Remember, PBGC offers direct deposit. It's the most secure and fastest way to receive your payment, and your funds are always available on payday — even if the weather's bad, the post office is closed, or you're out of town. The future electronic direct deposit dates are already mapped out.

To learn more or sign up for direct deposit, please visit MyPBA or call 1-800-400-7242.

On June 26, 2013, the Supreme Court ruled that Section 3 of the Defense of Marriage Act (DOMA) is unconstitutional.

Section 3 of the Defense of Marriage Act of 1966 defined "marriage" as a "legal union of one man and one woman as husband and wife" and a "spouse as "a person of the opposite sex who is a husband or a wife."

As a result, PBGC changed its policy to recognize same-sex marriages in our administration of benefits in terminated plans under the same rules applicable to opposite-sex marriages.

For a more detailed explanation of how PBGC recognizes marriage, please visit the "Benefits" section of our Workers & Retirees page. 

The legislation that authorizes the Health Coverage Tax Credit (HCTC) expires January 1, 2014, and the tax credit will no longer be available.

Some key dates in this program's expiration were/are:

October 1: the HCTC Program will no longer accept new registration forms for individuals or qualified family members who wish to be enrolled into the monthly HCTC program

December 24: The final monthly HCTC payment due date

January 1: HCTC expires

PBGC has a HCTC webpage that details some additional information. The Internal Revenue Service (IRS) also has a webpage dedicated to periodic updates with important information affecting the HCTC program