On June 26, 2013, the Supreme Court ruled that Section 3 of the Defense of Marriage Act (DOMA) is unconstitutional.
Section 3 of the Defense of Marriage Act of 1966 defined "marriage" as a "legal union of one man and one woman as husband and wife" and a "spouse as "a person of the opposite sex who is a husband or a wife."
As a result, PBGC changed its policy to recognize same-sex marriages in our administration of benefits in terminated plans under the same rules applicable to opposite-sex marriages.
For a more detailed explanation of how PBGC recognizes marriage, please visit the "Benefits" section of our Workers & Retirees page.
The legislation that authorizes the Health Coverage Tax Credit (HCTC) expires January 1, 2014, and the tax credit will no longer be available.
Some key dates in this program's expiration were/are:
October 1: the HCTC Program will no longer accept new registration forms for individuals or qualified family members who wish to be enrolled into the monthly HCTC program
December 24: The final monthly HCTC payment due date
January 1: HCTC expires
PBGC has a HCTC webpage that details some additional information. The Internal Revenue Service (IRS) also has a webpage dedicated to periodic updates with important information affecting the HCTC program.
PBGC's FY2013 Annual Report, released Friday, provides a detailed summary of our year — both successes and areas for improvement.
The 125-page review of the agency covers the period beginning Oct. 1, 2012 and ending Sept. 30, 2013.
PBGC's deficit increased to about $36 billion in FY2013, up from about $34 billion last year.
Opening with messages from PBGC Board Chair, Secretary of Labor, Thomas E. Perez and PBGC Director Josh Gotbaum, the report examines ways to improve the agency's financial health and highlights our great scores in customer service.
Retirees receiving benefits continue to rate PBGC as one of the best in government for its commitment to customer service. The agency ranks in the top 3 percent in a survey measuring 154 categories of customer responsiveness. Retirees gave PBGC a score of 90 on the American Customer Satisfaction Index (ACSI), more than 20 points above the government average. A score of 80 or higher is considered excellent, whether for a government agency or a private business.
Aside from our distinguished customer service, the report also discusses three overarching goals:
- Preserve plans and protect pensioners
- Pay pension benefits on time and accurately, and
- Maintain high standards of stewardship and accountability
Since you're a Retirement Matters subscriber, you've been kept abreast of PBGC news as it happens. This report can give you further insight on the year in review at PBGC.
See the full FY2013 Annual Report (PDF).
Beginning in 2014, the maximum yearly guarantee for a 65-year-old retiree will be almost $59,320 – a 3.2% increase from the $57,500 rate in 2013.
Most retirees who get their pension from PBGC – almost 85 percent according to a 2006 study – receive the full amount of their promised benefit. In some cases, retirees can receive more than the PBGC maximum guarantee.
The PBGC maximum guarantee is based on a formula prescribed by federal law. Yearly amounts are higher for people older than age 65 and lower for those who retire earlier or choose survivor benefits.
If a pension plan ends in 2014, but a retiree does not begin collecting benefits until a future year, the 2014 rates still apply. For plans that terminate as a result of bankruptcy, the maximum yearly rates are guided by the limits in effect on the day the bankruptcy started, not the day the plan ended.
The increase is not retroactive and applies only to single-employer pension plans. The maximum guarantee limit for participants in multiemployer plans is $12,870 with 30 years of service, which has been in place since 2001.
For more information, see PBGC's Maximum Monthly Guarantee Tables or a previous blog post "Making Sense of the Maximum Insurance Benefit."
Things looked bleak last year for plan funding when a U.S. District Court in Massachusetts said private equity firms didn't operate as trades or businesses, but passive investors in the companies they own. If the ruling was left intact, it would have created a major loophole in this kind of liability for private equity funds connected to pension plans.
At the time, the court considered whether two funds managed by private equity firm Sun Capital were responsible for $4.5 million in withdrawal liability after their company, Scott Brass, a Rhode Island-based metal fabricator, left the New England Teamsters multiemployer plan.
Such distinctions are important because entities engaged in a trade or businesses may be responsible for pension shortfalls in single employer plans and for withdrawal liability in multiemployer plans.
Earlier this year, the Teamsters asked the First Circuit Court of Appeals to revisit the issue and PBGC filed a friend of the court brief supporting their cause.
PBGC insures traditional pensions. So for years, we told people that we had nothing to do with defined contribution plans, such as 401(k)s.
But we're also interested in the retirement security of all Americans. That's why we're considering a program that would deal with the benefits of missing participants in terminated defined contribution plans.
We're looking for feedback from participants, employers, and retirement experts on the value of developing such a program. We need input on the scope of the problem of missing participants and the need for PBGC to take in the benefits and look for people.
Also, we want to understand the value of a database where people can search for their benefits, and the impact that a PBGC program might have on private companies that perform similar services.
According to the Department of Labor, in 2010, the most recent year available, there were more than 650,000 defined contribution plans with 88 million people. That same year, about 29,000 defined contribution plans, covering some 1.2 million people, terminated.
This effort would expand our finding an unclaimed pension search on the agency's website, where visitors can see if they're owed a traditional pension benefit from one of the failed plans PBGC assumed.
To make good decisions, and before we act, we're inviting the public to weigh in. You can submit your comments through email@example.com.