Last week, there was a Kodak moment that all of the company's employees and retirees could be proud of.
On Tuesday, Eastman Kodak Co., known for its iconic film business, ended a 20 month bankruptcy proceeding with its two pension plans intact. That means the nearly 63,000 people covered by those plans will have a more secure retirement.
When companies seek bankruptcy protection it doesn't automatically mean that plans will be shut down and come to us. During Kodak's bankruptcy, we were on the unsecured creditors committee and we worked with them to ensure the plans would continue.
For more than 100 years, every Labor Day, America has celebrated working people's contributions. Labor Day is observed and celebrated in different ways all across the country by people in every walk of life. It constitutes a yearly national tribute to the contributions workers have made to the strength, prosperity, and well-being of our country.
And after our working lives, we can continue to contribute to the country's strength and prosperity through secure retirements. When retirees can rely on their own secure retirement income, the economy wins, and that means workers win too.
PBGC wishes every American a safe and happy Labor Day. We reaffirm our commitment to protecting the more than 40 million American workers in private pension plans, to paying benefits for a million and a half people whose companies could not, and to fighting for American retirement security as part of every worker's American dream.
For a more in-depth look at the meaning of Labor Day, visit DOL's Labor Day 2013 webpage.
The proposed Secure, Accessible, Flexible and Efficient (SAFE) Retirement Plan is outlined in the Center for American Progress's (CAP) report "American Retirement Savings Could Be Much Better." The SAFE Plan would combine elements of a traditional defined benefit pension — including regular lifetime payments in retirement, professional management, and pooled investing — with elements of a defined contribution plan, such as predictable costs for employers and portability for workers.
PBGC will pay retirement benefits for more than 650 current and future retirees of Allied Systems Holdings Inc., a vehicle transportation business based in Atlanta, Ga.
The agency stepped in because Allied Systems is selling the majority of its assets in bankruptcy proceedings and potential buyers haven't agreed to continue the company's three single-employer pension plans.
PBGC will pay all pension benefits earned by Allied Systems retirees up to the legal limit of about $57,500 for a 65-year-old.
Retirees will continue to get benefits without interruption, and future retirees can apply for benefits as soon as they are eligible.
According to PBGC estimates, Allied Systems plans are collectively 58 percent funded with $45 million in assets to pay $78 million in benefits. The agency expects to cover the entire $33 million shortfall.
With recent news of the Detroit bankruptcy, more people are asking about PBGC's role in public pensions. However, by law, PBGC doesn't insure state, county, or city plans.
While we insure most private-sector (non-governmental) pension plans, Congress has also defined exceptions that PBGC does not insure. But for more information about public pensions, please contact the National Conference on Public Employee Retirement Systems.
The Wall Street Journal CFO Network Annual Meeting 2013 wrapped up last month. PBGC Director Josh Gotbaum participated in an interview session titled "The Great American Pension Crisis: Funding Past Promises and Future Retirement."
In his interview with Gabriella Stern, Deputy Managing Editor, WSJ Digital Network, Director Gotbaum focused on how U.S. companies will tackle mounting pension obligations in the coming years.
Dallas Salisbury, President and CEO, Employee Benefit Research Institute, also offered perspectives.
Take a look at the Dow Jones video recording of the interview. NOTE: The video may take a minute or two to fully load.