From shipping to staffing, the Chamber and its partners have the tools to save your business money and the solutions to help you run it more efficiently. Join the U.S. Chamber of Commerce today to start saving.
There is much talk about overall financial literacy and the need for education on various fiscal issues. Understandably, there are many people who find this task daunting. And when you add the idea of planning for retirement, it can become downright overwhelming. Nonetheless, as part of financial literacy, workers should also consider retirement literacy.
The biggest mistake is often not knowing what you don’t know.
The U.S. Chamber helps plan sponsors and workers with this goal by providing information on an agency that is focused on retirement and now has an office specifically to help plan sponsors and plan participants.
On Tuesday, April 25th, the Chamber presented the PBGC Participant & Plan Sponsor Advocate Webinar that featured PBGC participant and plan sponsor advocate Constance Donovan, and associate advocate Camille Castro. During the presentation Connie and Camille highlighted the role of the office and their recent activities.
The Pension Benefit Guaranty Corporation (PBGC) is an independent agency established by Congress to protect retirement income provided through private-sector defined benefit plans--pensions. The PBGC guarantees that all participants receive the “basic benefits” for their plan up to legal limits set by Congress that include: pension benefits at normal retirement age; most early benefits; annuity benefits for survivors of plan participants; and most disability benefits.
The agency provides protection for plans through two pension insurance programs – the single-employer program and the multiemployer program – that act as a safety net in the event that employer-sponsored plans are either determined to have insufficient funds by the PBGC or if the plan becomes insolvent. When a single-employer program becomes underfunded or insolvent, the PBGC then assumes responsibility for the plan and pays benefits to current/future retirees directly. Alternatively, when a multiemployer plan fails to meet funding obligations the PBGC will indirectly support participants by providing financial assistance to the plan which they are enrolled.
Although the PBGC is headed by a presidentially appointed director and is governed by a three-member board consisting of the Secretaries of Labor, Commerce, and Treasury, the agency does not receive federal funding through tax revenue. Rather the corporation receives funds from premiums paid by employers insured under the PBGC, investments, and from the assets of pension plans the agency takes over as trustee as well as the recoveries from companies formerly responsible for failed plans.
Office of the Participant & Plan Sponsor Advocate (OPPSA)
Created in July of 2012 after the passage of the Moving Ahead for Progress in the 21st Century Act (MAP-21) was signed into law, the Office of the Participant and Plan Sponsor Advocate (OPPSA) acts as a liaison for plan sponsors and participants of defined benefit plans. The office is responsible for resolving disputes between the PBGC and its customers, recommending legislative changes, and filing an annual report to Congress to assess administrative practices and mitigate persistent problems.
In alignment with the statutory authority outlined under the MAP-21, the advocate’s office works to improve communication between the PBGC and the plan sponsor community by offering free services to participants and plan sponsors whose defined benefit plans are insured by the agency. To increase transparency and mitigate frustration with agency enforcement practices the OPPSA has been working to keep channels of communication open by coordinating with and amongst PBGC departments to more effectively voice plan sponsor concerns for both taxable and non-profit organizations. This is particularly important given that many plan sponsors are left in limbo while awaiting a response from the agency regarding the outcome of pending agency case decisions for complex issues.
Annual Report of the Participant and Plan Sponsor Advocate
The OPPSA is required to submit an annual report to Congress that provides a detailed overview of its activities and legislative recommendations. Included in the report is an outline of assistance requests received for the calendar year as well as a full analysis of activities both of which aid in measuring the efficiency of the office. By collecting and comparing data on a cyclical basis the OPPSA is able to provide Congress with a comprehensive picture of key trends that are included as part of their recommendations for legislative and regulatory changes.
Resources like those provided by the PBGC are a valuable tool when managing your retirement strategy. Moreover, having an office that can help plan sponsors and workers navigate the agency can be critical. As we tackle financial literacy and retirement planning, the OPPSA can provide significant assistance for both plan sponsors and plan participants.
*If you need assistance in resolving an issue with the PBGC, contact the Office of the Participant & Plan Sponsor Advocate at email@example.com or (202) 326-4448. Additional information can be found on the OPPSA website.