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)
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.
PBGC's FY2013 Annual Report, released Friday, provides a detailed summary of our year — both successes and areas for improvement.
The 125-page review of the agency covers the period beginning Oct. 1, 2012 and ending Sept. 30, 2013.
PBGC's deficit increased to about $36 billion in FY2013, up from about $34 billion last year.
Opening with messages from PBGC Board Chair, Secretary of Labor, Thomas E. Perez and PBGC Director Josh Gotbaum, the report examines ways to improve the agency's financial health and highlights our great scores in customer service.
Retirees receiving benefits continue to rate PBGC as one of the best in government for its commitment to customer service. The agency ranks in the top 3 percent in a survey measuring 154 categories of customer responsiveness. Retirees gave PBGC a score of 90 on the American Customer Satisfaction Index (ACSI), more than 20 points above the government average. A score of 80 or higher is considered excellent, whether for a government agency or a private business.
Aside from our distinguished customer service, the report also discusses three overarching goals:
- Preserve plans and protect pensioners
- Pay pension benefits on time and accurately, and
- Maintain high standards of stewardship and accountability
Since you're a Retirement Matters subscriber, you've been kept abreast of PBGC news as it happens. This report can give you further insight on the year in review at PBGC.
See the full FY2013 Annual Report (PDF).
Beginning in 2014, the maximum yearly guarantee for a 65-year-old retiree will be almost $59,320 – a 3.2% increase from the $57,500 rate in 2013.
Most retirees who get their pension from PBGC – almost 85 percent according to a 2006 study – receive the full amount of their promised benefit. In some cases, retirees can receive more than the PBGC maximum guarantee.
The PBGC maximum guarantee is based on a formula prescribed by federal law. Yearly amounts are higher for people older than age 65 and lower for those who retire earlier or choose survivor benefits.
If a pension plan ends in 2014, but a retiree does not begin collecting benefits until a future year, the 2014 rates still apply. For plans that terminate as a result of bankruptcy, the maximum yearly rates are guided by the limits in effect on the day the bankruptcy started, not the day the plan ended.
The increase is not retroactive and applies only to single-employer pension plans. The maximum guarantee limit for participants in multiemployer plans is $12,870 with 30 years of service, which has been in place since 2001.
For more information, see PBGC's Maximum Monthly Guarantee Tables or a previous blog post "Making Sense of the Maximum Insurance Benefit."
Updated on 10/17/2013
If you get your health care coverage through the Internal Revenue Service's HCTC Program, you should know that the program is in the process of returning to regular operations. For more information, please call the HCTC Customer Contact Center at 1-855-379-0440.
About 11,000 PBGC benefit recipients participate in the Health Care Tax Credit Program, administered by the Internal Revenue Service. If you get your health care through HCTC, please read the following important message from the IRS:
"10/10/13 - Due to the federal government shutdown, the HCTC Program is currently closed and unable to issue payments to Health Plan Administrators on behalf of Monthly HCTC Participants. Although invoices were mailed to Monthly HCTC Participants in October, a timely payment to Health Plan Administrators cannot be guaranteed at this time. Any payment made to the HCTC Program during the shutdown will be processed upon receipt. For anyone who has already paid, or plans to pay, the HCTC Program in October, a payment will be issued to your health plan as soon as the government reopens and the HCTC Program becomes operable. To prevent a lapse in your health coverage, the HCTC Program suggests that you make a 100% payment directly to your health plan administrator in October and then claim the yearly HCTC for that payment when you file your 2013 federal income tax return. We understand the financial hardship facing our HCTC Participants and apologize that we cannot provide greater support at this time."
Please note that PBGC has no further information about the status of HCTC.
Academy President-Elect Tom Terry, PBGC Director Josh Gotbaum, Academy President Cecil Bykerk
Source: American Academy of Actuaries
PBGC Director Josh Gotbaum addressed the American Academy of Actuaries board last week. He applauded the academy's discussion paper, "Risky Business: Living Longer Without Income for Life," and encouraged the group to continue its lifetime income initiative. Gotbaum also discussed PBGC's efforts promoting sound retirement systems, and provided several ideas for how Congress, the public, and employers could each do their part to make sufficient lifetime income a reality.
In August, an analysis by the academy supported the methods used by PBGC to calculate the agency's financial position. "The Pension Committee of the American Academy of Actuaries believes the methods and assumptions used by the PBGC produce a reasonable representation of the PBGC's current obligation and deficit," the group said.
Editor's note: Portions of this blog post were reprinted from This Week with permission from the American Academy of Actuaries.