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PBGC Blog: 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.

  1. Road sign with the words Retirement Ahead.Americans are deeply worried about retirement. Some 85 percent report that they are highly anxious about their retirement prospects. Read The Washington Post article, "Americans anxious about Retirement."
  2. Pensions are highly cost efficient. They can provide a given retirement benefit at about HALF the cost of an individual 401(k) account because pensions pool longevity risk and achieve better returns by investing for the long term. Read the report, "A Better Bang for the Buck: The Economic Efficiencies of Pensions."
  3. Pension benefits provide critical economic stability and accounted for a $1 trillion in economic output. In 2009, pensions supported some 6.5 million jobs. Read the report, "Pensionomics 2012: Measuring the Economic Impact of DB Pension Expenditures."
  4. Pensions reduce the risk of elder poverty and reduce public assistance costs. In 2010, older American households with pension income were nine times less likely to fall into poverty than those who had no pension income. Read the report, "The Pension Factor 2012: The Role of Pensions in Reducing Elder Economic Hardships."
  5. Americans overwhelmingly support Congressional action to provide all Americans with access to a new type of privately run pension plan. More than 90 percent would favor a new pension plan that is available to all Americans that is portable, and provides a monthly check in retirement. Read the report, "Pensions & Retirement Security 2013: A Roadmap for Policy Makers."

The National Institute on Retirement Security originated the content of this post.

Since the end of the recession more people are working for employers that offer retirement plans, and plan participation is up, according to a new report from the nonprofit Employee Benefit Research Institute — but most workers still have no retirement plan.

The data in the report is from the U.S. Census Bureau's latest Survey of Income and Program Participation (SIPP) on retirement plan participation, covering December 2011 to March 2012.

Some key takeaways are:

  • 61 percent of all workers over age 16 had an employer that sponsored a pension or retirement plan for employees in 2012, up from 59 percent in 2009.
  • Workers participating in a plan increased to 46 percent in 2012, up slightly from 2009 (45 percent) but below 2003 (48 percent).
  • The vesting rate (the percentage of workers who say they were entitled to some pension benefit or lump-sum distribution if they left their job) stood at 43 percent in 2012, up from 24 percent in 1979.
  • This change is largely due to the increased number of workers participating in defined contribution retirement plans (such as 401(k) plans), where employee contributions are immediately vested, and faster vesting requirements in private-sector pension plans.
  • 401(k)-type plans were considered the primary plan by 78 percent of workers with a plan. Defined benefit (pension) plans were the primary plan for 21 percent of workers.

Take a look at notes from the Retirement Plan Participation: Survey of Income and Program Participation (SIPP) Data, 2012

A secure retirement is every worker's dream, but successful retirement planning is what makes that dream a reality.  

There are many tools and resources to help make the process a lot simpler and less daunting.

For instance, the U.S. Department of Labor, Employee Benefits Security Administration (EBSA) has a great online publication complete with interactive worksheets to help you with the process of retirement planning.

Taking the Mystery Out of Retirement Planning is available online and can also be requested in print.

We hope this resource is helpful!

Coins in a nest.From Phyllis C. Borzi, Assistant Secretary of Labor for Employee Benefits Security:

Women have made enormous strides over the past three decades, in the workplace and beyond – and it's important to reflect on the men and women who fought for the changes that have led to greater gender equality. One of those changes was introduced 29 years ago: The Retirement Equity Act became law, ushering in important protections for America's workers and their families.

As the assistant secretary for the Employee Benefits Security Administration, one of my chief responsibilities is to oversee the administration and enforcement of Title I of the Employee Retirement Income Security Act of 1974, which sets minimum standards for pension plans.

ERISA was and is an important law that protects the retirement savings of America's workers, but the law's original text had some significant shortcomings, and those shortcomings disproportionately affected women.

ERISA has strict prohibitions against the "alienation of benefits," so that creditors could not claim an employee's pension benefits. But as written in 1974, this also meant that divorced women were unable to obtain their fair share of their ex-husband's retirement benefits – even if a woman had forfeited a career of her own in order to support a husband or raise the couple's children.

More...

MyPBA  (My Pension Benefit Account) is our secure online service that lets you, the participant, handle certain common transactions with PBGC.

Participants in PBGC-trusteed plans can use PBGC's fast, free, and secure online service tool to apply for pension benefits, update contact information, adjust federal income tax withholding, and more.

Since generations accustomed to using technology are joining the ranks of retirees, this helps PBGC in enhancing technological resources, making your interactions with PBGC easier and more user-friendly.  

The old system, which came online around 2004, has been decommissioned, while the new MyPBA recently got a facelift complete with features designed to give participants a more convenient option to calling the agency's Customer Contact Center.

Some of the new and improved items include:

  • login
  • registration
  • email communications

About 250,000 participants with MyPBA accounts are expected to use the new MyPBA system at some time in the future.

But, if you wish to call PBGC's Customer Contact Center, we'd still like to hear from you!