The retirement crisis is real and growing as millions of workers have less access to employer-sponsored plans and are saving less money. As a result, the opportunity of living a secure and comfortable retirement among many workers is gradually decreasing.
This crisis has not gone unnoticed. On Monday, Senator Elizabeth Warren (D-MA) spoke on the Senate floor about the need to address issues of retirement and social security. Throughout the speech, Warren reaffirmed the fact that the nation does face a retirement crisis, contrary to the belief of the Washington Post's recent editorial. Warren also called on Congress to strengthen Social Security rather than to cut benefits that many retirees depend on for their retirement.
As Warren said, "the conversation about retirement and Social Security benefits is not just a conversation about math. At its core, this is a conversation about our values."
Read the full text of the speech.
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).
Photo provided courtesy of Drexel University's Earle Mack School of Law
From the Pension Rights Center:
The Employee Retirement Income Security Act ("ERISA"), the law governing private retirement plans, has changed quite a bit since it was signed into law in 1974. There have been numerous amendments, court cases, regulatory actions and other developments. ERISA has had such an impact on Americans' everyday lives that it has become a field of law unto itself.
ERISA buffs frequently come together to explore the law as it is now and to discuss how it impacts current and future retirees. But an in-depth exploration of ERISA's past is a much rarer occurrence. On October 25, 2013, lawyers, actuaries, and other professionals from all corners of the pension world gathered in Philadelphia for a unique, day-long discussion of the history behind the law. The topic? ERISA at 40 - What Were They Thinking? An Oral History of the Employee Retirement Income Security Act.*
The symposium, hosted by Drexel University's Earle Mack School of Law and co-sponsored by the Pension Rights Center and the American College of Employee Benefits Counsel, was organized by Norman Stein and James Wooten. Norman Stein is a Drexel University law professor and PRC Senior Policy Advisor and James Wooten is a professor at SUNY Buffalo Law School and author of The Employee Retirement Security Act of 1974: A Political History. Participants in the symposium represented a Who's Who of ERISA, including Assistant Secretary of Labor of the Employee Benefits Security Administration, Phyllis Borzi, and J. Mark Iwry, Deputy Assistant Secretary of Treasury for Retirement and Health Policy. The symposium also featured several individuals with ties to the Pension Rights Center: PRC Board members Dan Halperin, Regina Jefferson, and Ian Lanoff; Fellows Dianne Bennett, Bill Bortz, Frank Cummings, Bob Nagle, and Henry Rose; and PRC's Director, Karen Ferguson.
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.
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.
See the string of messages in the lower right-hand corner of this blog page? That's PBGC's Twitter feed. You can easily access the full feed on Twitter by clicking the famous Twitter bird under "Follow PBGC" to the right.
We use Twitter to spotlight our day-to-day efforts to protect pensions. When you follow us, you'll get quick bits of information to keep you in the know about PBGC. And each day you'll find a new fact about pensions, a link to a relevant article, or a news update about retirement security.
If you're among the more than 800,000 retirees who rely on PBGC for monthly income, you'll be first to get a link to your retiree newsletter.
If you work in the pension field, we'll tweet our monthly interest rates, premium filing updates, and news of important regulatory changes.
If you like one of our tweets and want to share it with friends, please favorite the tweet or simply retweet it, and help us spread the word as we work to save America's pensions.
Follow us at https://twitter.com/USPBGC.