Resource Type: Fact Sheets and Issue Papers
Federal Pension Insurance Protections
In 1974, Congress created a federal pension insurance program for certain private retirement plans. This program is administered by the Pension Benefit Guaranty Corporation (PBGC). What plans are protected by the PBGC? Most traditional private pension plans, commonly known as defined benefit plans, are protected by the PBGC, but not all. For example, certain plans covering […]
How Well-Funded is Your Pension Plan?
Thanks to the Pension Protection Act of 2006, people covered by a traditional defined-benefit pension plan should now receive a pension funding notice every year, which gives workers an idea of how well-funded their plan is. However, if a funding notice is not available, it is possible to get a rough idea of the financial […]
Defined Benefit Plans and the PBGC
Background Currently, 44 million private sector workers and retirees are covered by traditional pension plans. Companies are required to contribute enough money to these plans over time to pay the benefits promised by these plans. Sometimes the amounts contributed, plus investment earnings, are inadequate, or a company becomes financially troubled, and the plan is closed […]
Can Your Pension Plan Afford To Give COLAs?
Over time, pensions shrink in value due to inflation. To see how inflation has affected your pension, use the Census Bureau’s Inflation Calculator. If your pension plan is overfunded – that is, its assets (the amount in the plan) are greater than its obligations (the amount it must pay in pension benefits), your plan may […]
Q-SERPs
How Companies Manipulate the Law to Fund Executive Pay Packages with Workers’ Pension Money In 2008, the Wall Street Journal exposed an unethical practice in which companies use pension plans that are set up for their rank-and-file workers to finance extravagant retirement benefits for a small number of high-paid executives.1 This practice is a clear manipulation […]
Why People Need Pensions
Millions of Americans are heading toward an inadequately funded retirement. Without adequate income, older adults will lack the resources that enable them to live independently, afford health care, and continue to contribute to society. While Social Security has kept the majority of older adults from sinking into destitution, far too many retirees are having trouble […]
Pension Challenges and Opportunities
The nation’s $10 trillion pension system is facing formidable new challenges. Companies that once provided traditional employer‐paid pensions as a standard part of their compensation packages – giving individuals a guaranteed stream of income with security in their later years – are retreating from them in favor of 401(k) plans that shift the burden and […]
Phased Retirement
What is phased retirement? The term phased retirement refers to programs in which workers can reduce their working hours in lieu of immediate retirement. An employee would draw a reduced salary, which she would supplement with distributions from her employer’s retirement plan. Such plans can in some circumstances be positive for both the employee and […]
