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PBGC Blog: Retirement Matters

Kodak logo

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.

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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.

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Allied Systems Holdings Inc. logoPBGC 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.

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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!

Right now, the Powerball jackpot stands at $425 million, but whoever wins it will probably be broke within a few years. That's what happens to 70% of winners, according to the National Endowment for Financial Education.

That made us think about retirement. (We know, we know... what doesn't?)

Lottery winners can choose to take annual payments, pay lower taxes on their newfound windfalls, and have 30 years before worrying about running out of money. But research shows that the vast majority of winners choose to take a windfall lump sum instead.

But those who take the lump sum apparently don't "invest" it so wisely.

So if you're the lucky Powerball winner, unless you plan to keep your job, think twice about how to fund your retirement, and whether to take your winnings all at once. Remember, that gigantic pot of money has to last your whole life, not just a few years.

And even if you don't win the lottery, beware of a lump sum of whatever size. It may look good now, but you take on the risk that you'll outlive it. Most folks do better with guaranteed income.