Skip to main content

About PBGC

PBGC Blog: Retirement Matters

‘What is a Pension?’

  |   April 17, 2013

PBGC protects pensions. So, what is a pension? To most people, a pension is a retirement arrangement in which your employer promises you a regular payment from the day you retire, for as long as you live. The amount of your pension usually depends on how long you worked for an employer and your salary with that employer. Ask a retiree, "What is a pension?" and they may say,

"A pension is the $400 per month I receive for my many years of service at Acme Widgets. My pension helps to supplement the $600 per month I receive from Social Security and my retirement savings."

Normally, employees must work for an employer for a certain time period before the benefits they have earned belong to them. After they have done so, they are considered "vested" in those benefits. Today, in some pension plans, you are fully vested after five years on the job. In others, it takes you seven years to become fully vested - but you become vested in increasing portions of your benefit starting at three years. If you've worked for more than one company long enough to become vested in multiple pension plans, you can receive more than one pension payment.

More...

Big Apple logo.

PBGC will pay retirement benefits for more than 200 current and future retirees of Bill Johnson's Restaurants Inc. The eatery has five locations throughout Arizona.

The agency is stepping in because the pension plan doesn't have enough money to pay benefits when due. Also, Bill Johnson's is attempting to reorganize in bankruptcy proceedings and will likely abandon the plan when the case concludes leaving no one to administer benefits.

The restaurant chain operates under the Bill Johnson's Big Apple brand, and its retirement plan, the Defined Benefit Plan of Bill Johnson's Restaurants Inc., will end as of April 4, 2013.

PBGC will pay all pension benefits earned by the company's retirees up to the legal limit of about $57,500 a year for a 65-year-old.

More...

PBGC, Taxes, and You

  |   March 25, 2013

As the income tax deadline approaches, here is some important information about PBGC benefits and taxes.

While PBGC is required to withhold federal income tax, we do not withhold for state taxes. If your state has an income tax, you may owe tax on your PBGC benefit. To find out more, contact your state tax office (Excel file, 14.4 KB).

Also, if you receive a benefit from PBGC, we report the amount annually to the IRS.

For income tax purposes, each January PBGC sends you an IRS Form 1099-R that states the amount we paid you the previous year.

If you need a Form 1099-R for 2012 and haven't received it, PBGC will get you one.

The IRS has a tool, "Is My Pension or Annuity Payment Taxable?" that will help you determine if your pension or annuity payment from an employer-sponsored retirement plan is taxable.

Couple moving out of their sold home.

Do you get a PBGC pension check?

If so, you've got a long-term relationship going on — with PBGC.

We're happy about that.  But, we want to stay in touch.  

Even if your check is deposited directly into your bank account, PBGC still needs your current street address to keep paying you.

So when you move, be sure to tell us your new address. 

You can do it online with MyPBA.  If you've never used MyPBA, it's easy to get started.

Or, you can change your address through our Customer Contact Center at 1-800-400-7242.  

We'll sleep better knowing where you are.  And, we promise to drop you a line now and then.

Weekly Pension News Round-Up

  |   March 15, 2013

Here's what made headlines this week in pension news:  

The Journal Gazette publishes, "Retiring securely a rising concern."

HeraldNet runs, "Pensions part of system that actually works right." 

SmartHR Manager blogs about "More Pension Sponsors Considering Lump-sum Payouts." 

PBGC will pay retirement benefits for more than 1,500 current and future retirees of Metavation LLC, an auto parts supplier based in Southfield, Mich. 

The agency is stepping in because the company's parent, Revstone Transportation LLC, is selling its ownership interest. The transaction will further compromise Metavation's underfunded pension plans, which will be unable to pay retirement benefits.

Formally known as Hillsdale Automotive LLC until 2008, Metavation sponsors two pension plans: the Hillsdale Salaried Pension Plan and the Hillsdale Hourly Pension Plan. Both plans will end as of March 1, 2013.

PBGC will pay all pension benefits earned by the company's retirees up to the legal limit of about $57,500 a year for a 65-year-old.

Until PBGC becomes trustee, the plan remains under Metavation's control. Plan participants will be notified by letter when the agency takes responsibility. At that time, retirees will continue to get benefits without interruption, and future retirees can apply for benefits when eligible.

Metavation makes powertrain and chassis components for the automotive industry. The company also provides other parts for engines, drivelines, and transmissions.

According to PBGC estimates based on information provided by Metavation, the plan is 50 percent funded with $47 million in assets to pay $93 million in benefits. The agency is expected to cover most of the $46 million shortfall.

Participants with questions about their pension benefits should contact the plan administrator. The agency won't be able to address concerns about benefits until it takes responsibility for the plan.