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PBGC Blog: Retirement Matters

There's a growing trend among employers who want to exit the pension game. Some have decided to close out their traditional pension plans and instead offer lump-sum payouts or an annuity from an insurance company.

Many of the reasons companies give for leaving traditional pensions are understandable: the boom and bust market cycles that make it difficult to maintain a reliable funding stream and the often complex regulatory hassles connected to such plans.

But the problem with this practice is the responsibility for helping people prepare for retirement is shifting away from companies, which are well-suited to handle this burden, to retirees who aren't. The heavy lifting of managing investments, making sure returns can pay for a lifetime, and possibly the lifetime of a surviving spouse, all rest on the shoulders of retirees.

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Janell Muhammed

By Janell Muhammad
Social Media Specialist

As PBGC takes part in National Save for Retirement Week, one employee reflects on the generation gap between Boomers and XYs in the quest for a secure retirement.


Working always has been a privilege and an honor for me. From the moment I was legally able, which in my case was the age of 13, I have held a job. As part of my duties, I have perfected the ice cream cone, salted McDonald's world-famous French fries, and advised young ladies on wardrobe choices at Loft. Whether part-time or full-time, after school or on the weekends, as a teenager, work kept me busy.

Today, I work for an agency focused on retirement. Considering the people we serve at PBGC, I pondered what it meant beyond being a federal employee.

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Pen and calculator on a sheet of paperConfused about saving for retirement? Or have you been procrastinating on getting started? Here's a recommendation on how to begin.

Last year, Time magazine ran a top 10 hit list to improve your financial health. Coming in at number three: "Put 10% of Your Income Toward Retirement." One of the experts in the piece suggests that saving and investing at least 10 percent of your income no matter how much you make will put you on the right path.

In April, the retirement publication, PlanSponsor, echoed this approach with the headline, "Households Saving 10% on Track for Retirement." The piece was based on findings from a Lifetime Income Survey by Putnam Investments. "Overall, the study found that American households deferring 10% or more of their income to retirement savings are on track to replace more than 106% of pre-retirement income."

So if you've been putting off saving for retirement and don't know where to begin, start putting away 10% and grow your nest egg from there.

A lot of jobs only offer a 401(k)-style plan to new employees – worse yet, most employees don't have a workplace retirement plan at all.

But there's good news too: about 75 million Americans, and their families, can still rely on lifetime income from a defined benefit pension plan. That's income that they'll get no matter how long they live, and no matter what happens in the markets.

We think that's important. We fight hard so that companies going through bankruptcy reorganization keep their pension plan promises. And, since it's up to the company whether to offer pensions or not, we work hard to reduce regulatory burdens, and to increase flexibility, for companies willing to offer them.

And, when a company's finances are so bad that it can't keep its pension promises, PBGC is there with a safety net.

Jobs that come with pensions are rarer these days, but landing one can help enhance the security of your retirement in these too-often uncertain times.

Visit our Press Room to see what we're doing to protect pensioners and what we do to help employers continue to offer them.

Monthly CalendarWho's participating in National Save for Retirement Week? We are!

Now, you may be asking yourself, "What exactly is this week, and is this the only time I'm supposed to save for retirement?"

To answer your second question...Of course not!

Here's the answer to your first question:

National Save for Retirement Week was created to raise public awareness about the importance of saving for retirement. National Save for Retirement Week is held every year during the third week of October. The week provides an opportunity for employees to reflect on their personal retirement goals and determine if they are on target to reach them.

This effort started in 2006, when Senators Gordon Smith (R-OR) and Kent Conrad (D-ND) introduced the first resolution establishing the week-long focus on retirement. Their goals were to elevate public knowledge about retirement savings and to encourage employees to save and participate in their employer-sponsored retirement plans.

Today, plan sponsors and plan participants around the U.S. take part in this important seven-day event. We invite you to participate with us by staying tuned for a blog post a day, right here on Retirement Matters

Message to HCTC Participants

  |   October 2, 2013

As we've previously mentioned on Retirement Matters, PBGC is not affected by the federal government shutdown. If you count on us for your pension benefit, you will be paid on time.

However, if you get your health care coverage through the Internal Revenue Service's (IRS) Health Care Tax Credit (HCTC) Program, you may be affected by the shutdown.  If you participate in the HCTC Program, please read the following message from the IRS HCTC Stakeholder Engagement Team:

10/1/13 - The IRS HCTC Program is operating with a significantly reduced staff and capacity during the current government shutdown. The HCTC Program will mail invoices and make payments to health plans for current Monthly Participants.  Please be sure your payment is received by the due date listed on your HCTC invoice. If you do not receive an invoice, please refer to a previous monthly invoice for your HCTC account number and consider making an online payment. You can also obtain a blank payment coupon on this website.

The HCTC Customer Contact Center will be closed.  If you have a health coverage or payment-related emergency you can call and leave a message at 1-855-379-0440; however please note that not all callers leaving a message at this number will receive service. This mailbox is being used to provide limited service to current monthly HCTC Participants only, who are facing an emergency health coverage or insurance payment issue.  We apologize, in advance, for our inability to provide greater service at this time. Thank you for your understanding.

When the federal government reopens, the HCTC Program will resume regular processing of all Registration Forms, Family Member Registration Forms, and Reimbursement Request Forms received by the October 1st cutoff for processing in advance of the 1/1/14 expiration of the Health Coverage Tax Credit.

Please note that PBGC does not have further information about HCTC coverage. If you have a question, please call the HCTC Customer Contact Center and leave a message at 1-855-379-0440.