What is the Pension Benefit Guaranty Corporation (PBGC)?
The PBGC is a federal corporation which insures the pension benefits of about 44 million workers and retirees in over 30,000 private sector defined benefits pension plans. The PBGC was created on September 2, 1974 when the “Employee Retirement Income Security Act (ERISA) of 1974” was enacted. A defined benefits pension plan that does not have enough money to pay benefits may be terminated if the employer responsible for the plan faces severe financial difficulty, such as bankruptcy, and is unable to maintain the plan. In cases such as these, the PBGC then pays pension benefits under the terms of the plan, subject to legal limits, to plan participants and beneficiaries. The majority of the plans the PBGC has trusteed have been in the manufacturing, steel and airline industries. To learn more about the PBGC, please visit the PBGC website.
