Often times, people don't know what the Pension Benefit Guaranty Corporation (PBGC) is, or what we do. Unfortunately, many find out about us when we have to assume responsibility for their pension plans either by way of company bankruptcy or the company's inability to pay retirement benefits.
A quick history lesson: On September 2, 1974, President Ford signed the Employee Retirement Income Security Act (ERISA), creating a federal pension insurance program and an agency — the Pension Benefit Guaranty Corporation — to run it. The agency was created to encourage the continuation and maintenance of private-sector defined benefit pension plans, provide timely and uninterrupted payment of pension benefits, and keep pension insurance premiums at a minimum.
Now that you know how we got started, we'd like to tell you a little about how we operate.
As our director Josh Gotbaum likes to put it, PBGC is similar to the FDIC, but instead of protecting depositors of insured banks, we protect pensions.
FACT: We protect the retirement incomes of more than 44 million American workers in more than 27,500 private-sector defined benefit pension plans.
So, what's a defined benefit plan?
FACT: A defined benefit plan provides a specified monthly benefit at retirement, often based on a combination of salary and years of service.
FACT: We are not funded by general tax revenues.
So, how is the revenue generated?
FACT: We collect insurance premiums from employers that sponsor insured pension plans, earn money from investments, and receive funds from pension plans we take over.
Visit our Web site to learn more about who we are and how we operate.
PBGC Director Josh Gotbaum sat down with his two new management hires — Diane Braunstein and Philip R. Langham — and members of the press. The reason: to announce Braunstein's and Langham's new roles and plans at the agency.
Braunstein will create the agency's up-and-coming Department of Quality Management. As the department's director, her focus will be on best practices for the agency, especially in the benefits department.
Langham was recently named the agency's new Benefits Administration and Payments Department director. With a few weeks in his new role, Langham is leading the improvements to ensure accurate pension plan valuations.
With decades of helping to shore up retirement security, both department directors are ready to support the agency's mission.
Read the full press release to learn more about the new directors.
Were you collecting or planning to collect a pension from Pemco World Air Services Inc.? If so, we've got news for you.
As of Wednesday, October 3, 2012, PBGC became the trustee of the Pemco World Air Services Inc. Pension Plan, which has some 1,252 participants, including 380 retirees.
Headquartered in Tampa, Florida, Pemco primarily provided aircraft maintenance, repair and overhaul services to commercial air carriers.
The company filed for bankruptcy on March 5, 2012 and the bankruptcy court approved the sale of their assets on August 9, 2012.
PBGC will pay all pension benefits earned by the company's retirees up to the legal limit of $56,000 a year for a 65-year-old.
Participants with questions about their pension benefits should contact PBGC Customer Service at 1-800-400-PBGC (7242).
Here's what made headlines this week in pension news:
"Federal Benefits Offered For Displaced RG Steel Employees," The Intelligencer/Wheeling News-Register reports.
The New York Times publishes, "Despite financial pressures, pensions will continue to provide secure retirement income for many people in the future..." in the "Achieving Retirement Goals" article.
Forbes outlines "7 Valuable Benefits You May Not Even Know You Have."
Recently, Business Insurance cartoonist Roger Schillerstrom published a montage of illustrations chronicling some of the highs and lows in the world of pensions over the past decade.
Our communications team also decided to document the agency's history by adding a cool new feature to the Facebook page — a photo movie. With pictures from day one, it highlights important milestones and behind-the-scenes efforts that protect America's pensions.
It's another short and simple way of telling our story.
Check out our Facebook movie timeline (link no longer available).
Photo Credit: Roger Schillerstrom, Business Insurance
Photo Caption: After the PBGC opposes American Airlines' plan to terminate its pension plans, the airline backtracks and agrees to freeze the plans instead, sparing the PBGC from what would have been its biggest-ever loss.