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PBGC Blog: Retirement Matters

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.

  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!