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PBGC Blog: Retirement Matters

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.

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

Like the old saying goes "if you don't use it, you lose it." A study of nearly half a million people in France revealed that people who delay retirement have less risk of developing Alzheimer's disease or other types of dementia.

Read the full Associated Press article on the USAToday website

NIRS: The retirement savings crisisA new study answers whether the retirement crisis is worse than we thought. The research report concludes that when all working-age families are counted, the typical family has only a few thousand dollars saved for retirement.

The study reveals:

  • The typical working-age household has only $3,000 in retirement account assets; the typical near-retirement household has only $12,000.
  • Four out of five working families have retirement savings less than one times their annual income.
  • The U.S. retirement savings deficit is between $6.8 and $14.0 trillion, depending on the household assets counted.

These findings are contained in a new research report, The Retirement Savings Crisis: Is it Worse Than We Think?, issued by the National Institute on Retirement Security (NIRS).

Read the full study on the NIRS website.