Strauss also said the PBGC is currently not planning to change its premium structure, despite finishing the last fiscal year with a $7 billion surplus.
With the decline in defined benefit plans, Americans are not saving enough for retirement, according to Strauss. Half of all Americans have no defined benefit plans. Half of all 401(k) plan participants have less than $13,000 accumulated, with few participants benefiting from the surging stock market, according to Strauss in a speech at the Midstates Benefit Conference in Chicago.
“After the longest period of economic growth in the nation’s history, only 25 percent of American families have $25,000 or more in the stock market,” Strauss said. “So when you read these cover stories in the news magazines about the millionaire next door and the 401(k) millionaires, don’t believe them.”
Strauss, whose agency insures the pensions of the nation’s defined benefit plan participants, said the only real option for building retirement security for the vast majority of Americans is through defined benefit programs.
“Cushion” for rainy day
On the premium structure, Strauss expressed gratitude over his agency’s solid financial base. But the director declined to discuss changing the premium structure. “This gives us a cushion to protect the insurance program in the event of an economic downturn,” he said.
He pointed to the PBGC’s long-term liabilities and various inherent, uncontrollable risks as reasons to not change premiums. Another economic downturn would put renewed pressure on the budget, especially since many of the covered companies are in cyclical industries.
Meanwhile, Strauss also said customer service stays a top priority. The agency hired a premium problem resolution officer, rolled out a new toll-free customer assistance number and a more flexible Form 5500 filing program.