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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. 

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.

More...

United We Stand at No. 19

  |   February 27, 2014

The United States maintained its retirement security ranking at 19th — the same from last year — among 150 nations analyzed by Natixis Global Retirement Index.

For overall retirement security, the U.S. remains behind the majority of countries in Western Europe and Canada, and ahead only of Israel on the list of the top 20 nations.

Natixis measures the quality of life for people in their retirement years based on 20 measures of health, wealth, quality of life, and material well-being that affect people's retirement security.

Read the full Natixis report: 2014 Global Retirement Index.

By now, you have probably received your Form 1099-R from us.

As you arrange to have your income taxes prepared and filed, we would like to share 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 2013 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.