by The Pension Benefit Guaranty Corporation (PBGC) is a United States government corporation created by the Employee Retirement Income Security Act of 1974 (ERISA) to encourage the continuation and maintenance of voluntary private pension plans and provide timely and uninterrupted payment of pension benefits. It insures the pension plans of some 44 million American workers and retirees in the event that their plan sponsors (usually their employers) cannot meet their obligations. The PBGC is funded by insurance premiums paid by plan sponsors, investment income, and assets and recoveries from failed plans.
Scope:
The Pension Benefit Guaranty Corporation (PBGC) is responsible for insuring pension benefits for private-sector defined benefit pension plans in the United States. This means that if a pension plan sponsor (usually an employer) is unable to meet its obligations to provide promised pension benefits, the PBGC steps in to pay a portion of those benefits to eligible plan participants. The PBGC’s insurance covers traditional defined benefit plans, not defined contribution plans such as 401(k) plans. The PBGC’s coverage is limited to certain types of benefits and certain maximum amounts, and not all pension plan participants may be eligible for PBGC coverage. The PBGC’s mission is to encourage the continuation and maintenance of voluntary private pension plans, provide timely and uninterrupted payment of pension benefits, and keep pension insurance premiums at the lowest level necessary to carry out its operations.
Pension Benefit Guaranty Corporation USA Responsibilities and Accountabilities
The Pension Benefit Guaranty Corporation (PBGC) is a federal agency that provides insurance for private sector defined benefit pension plans. Its main responsibilities include:
- Taking over and paying the benefits of pension plans that are terminated and have insufficient funds to pay benefits.
- Enforcing rules on how pension plans must be run and financed.
- Providing financial assistance to pension plans in critical and declining status to help them avoid termination.
- Providing information and assistance to participants and beneficiaries of pension plans.
The PBGC is accountable to Congress and the public for carrying out its mission to protect the pensions of American workers and retirees.
