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PBGC Blog: Retirement Matters

While we'd hope that you're using every day of every week to plan for your retirement, this week, April 7–11, 2014, has been designated as National Retirement Planning Week.

Organized by the National Retirement Planning Coalition — a group of prominent consumer advocacy and financial services organizations that are leading the charge to help Americans plan for retirement — this week represents a national effort to help consumers focus on their financial needs in retirement.

PBGC plays a role in this effort by protecting the retirement incomes of more than 40 million American workers in more than 26,000 private-sector defined benefit pension plans.

For informational resources, visit the National Retirement Planning Coalition's "Retire on Your Terms" webpage.

National Employee Benefits Day. April 2nd. http://www.ifebp.org

Created in 2004 by the International Foundation of Employee Benefit Plans (IFEBP), National Employee Benefits Day is nationally recognized on April 2.

According to the Employee Benefits Research Institute, almost nine in ten people don't think they'll have enough saved when they get to retirement. Study after study provides data pointing to the same conclusion: A crisis is coming. Are you prepared for it?

This year, the focus of National Employee Benefits Day is to increase awareness of the retirement crisis and to help plan sponsors motivate participants to actively engage in their financial wellness.

PBGC is always on the quest for finding new ways to make retirement security a hopeful reality for most Americans. Just yesterday, we announced a proposal that makes it easier for participants in 401(k) plans to get higher returns and get lifetime income — by moving their funds into traditional pensions.

To help make financial wellness more urgent for plan participants, the International Foundation of Employee Benefit Plans has created a number of resources that provide simple tools to get them thinking about their future.

Get started with IFEBP's helpful handouts that explain key terms for: Retirement Plans [PDF], Investments [PDF] and Credit [PDF].

Content in this blog entry was obtained from the International Foundation of Employee Benefit Plans website.

Did you recently receive an Annual Funding Notice? Wondering what it means?

Annual Funding Notices keep you (pension plan participants) informed about the financial status of your pension plan.

Now, you're probably wondering why you received the letter. The answer is simple. You received the letter because employers are required to send an Annual Funding Notice each year to everyone covered by their pension plan.

The notice provides you with information about:

  • How well your pension plan is funded
  • The value of your pension plan's assets and liabilities
  • How your pension plan's assets are invested
  • The legal limits on how much PBGC can pay if your pension plan ends

The bottom line is there is no need to panic. The notice does not mean that your pension plan is ending or that PBGC is taking over payment of your benefit. While PBGC insures your pension, the pension plan remains under the sponsorship of your employer. PBGC does not have any specific information about your benefit.

For questions about your funding notice, pension plan, or individual benefit, please contact your pension plan administrator, not PBGC. PBGC only has information about pension plans that have ended. You can find contact information for the pension plan administrator in the annual funding notice or through the employer sponsoring the plan, typically via the human resources office.

Additional information is available on our Annual Funding Notice for Defined Benefit Pension Plans page. 

Photo of Kathleen P. Utgoff

Kathleen P. Utgoff, PBGC Director 1985-89

In its 40-year history, PBGC has had 14 agency directors, including current Director Josh Gotbaum. One among them stands out, however. With Women's History Month underway, Retirement Matters features former agency director Kathleen P. Utgoff.

Among a dozen wood-framed portraits on the 12th floor of the agency's Washington, DC headquarters, one photo stands out. That's because the image depicts the only female ever to serve as PBGC's executive director.

Installed as the agency's seventh director during the Reagan administration, Utgoff led PBGC from 1985 to 1989. When her term ended, who knew that in 40 years of protecting America's pensions, her photo would be the only woman's to grace that wall of fame of former directors?

As the agency celebrates both National Women's History Month with the 2014 theme of Celebrating Women of Character, Courage, and Commitment, as well as PBGC's 40th anniversary with its theme of Celebrating the Past, Securing the Future, Retirement Matters thought it'd be a good idea to dust off some old Rolodexes and introduce, or in some cases reintroduce Utgoff to PBGC, which she calls "a jewel among agencies."

Cartoon representation of Kathleen P. Utgoff in front of sign reading PBGC Renovation Project. Project Engineer: Kathleen P Utgoff

Reprinted with permission, Business Insurance 1989. © Crain Communications, Inc.

In a 1989 cartoon (pictured left), cartoonist Roger Schillerstrom of Business Insurance depicts Utgoff at the completion of her term. She touted the PBGC Renovation Project as one of her biggest accomplishments.

Some plan participants may have been introduced to the agency under Utgoff's reign, but for those who have no idea who she is, here's "herstory."

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Ladies enjoying wine and each others company.

Every March we celebrate the profound impact women continue to have on American and world history. While Women's History Month is usually the designated time of year to robustly commemorate the contributions women have made to society, we also think it's a good time to take a look at the state of women's retirement security. After all, life after retirement is very important to "women's history."

First, let's be clear, the retirement picture is dismal for both men and women. But compared to men, women's retirement security is often less than adequate.

The United States Department of Labor reports married women tend to outlive their spouses by two years once they reach age 65 — that's two whole years of additional savings needed to cover the cost of living expenses that some do not factor in. Women also tend to take a more conservative approach when it comes to saving for retirement. Simply put, women do not invest in high-risk stocks because of the volatility of the stock market.

Another factor contributing to the bleak retirement outlook is women often delay saving for retirement. The Department of Labor also reports only 45 percent of the 62 million salaried women working in the United States contribute to a retirement plan.

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40th anniversary logo

PBGC was just getting started when Vietnam was winding down, President Nixon resigned, the NFL granted a franchise to Seattle, and Americans preferred avocado green kitchen appliances over anything that color on four wheels.

When we started, we churned out plans and memos and reports from typewriters and could smoke on the job, and pensions still seemed to be almost as solidly American as basketball, jazz, and poker.

In the distance, however, the sunrise of change was already hinting at dusk.

Events and crises, economic disruptions and volatility triggered a shift in how pensions were viewed — morphing from promises and pledges that were "solid" to being cast as liabilities on balance sheets. During 40 years our creativity and resourcefulness have been challenged, keyed on what tools we can use to protect Americans.

As we look at our 40 years to see where we came from and how our mission has been steadfast in changing dynamics, here is what part of our world was like when PBGC — as well as 21 of our current employees — was born.

The nation had never seen anything like us: an agency dedicated to saving pensions and protecting those about to lose pensions.

We were then, and we still are.

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