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What is the Pension Benefit Guaranty Corporation
PBGC Protects Retirement Incomes
PBGC is a federal corporation created by the Employee Retirement Income Security Act of 1974. It currently protects the pensions of nearly 44 million American workers and retirees in 30,330 private single-employer and multiemployer defined benefit pension plans. PBGC receives no funds from general tax revenues. Operations are financed by insurance premiums set by Congress and paid by sponsors of defined benefit plans, investment income, assets from pension plans trusteed by PBGC, and recoveries from the companies formerly responsible for the plans.
The Pension Benefit Guaranty Corporation (PBGC) protects the retirement incomes of nearly 44 million American workers in 30,330 private-sector defined benefit pension plans. A defined benefit plan provides a specified monthly benefit at retirement, often based on a combination of salary and years of service.
PBGC was created by the Employee Retirement Income Security Act of 1974 to encourage the continuation and maintenance of private-sector defined benefit pension plans, provide timely and uninterrupted payment of pension benefits, and keep pension insurance premiums at a minimum. Defined benefit pension plans promise to pay a specified monthly benefit at retirement, commonly based on salary and years on the job.
The program is not funded by general tax revenues. The organization collects insurance premiums from employers that sponsor insured pension plans, earns money from investments and receives funds from pension plans it takes over.
PBGC pays monthly retirement benefits, up to a guaranteed maximum, to about 612,000 retirees in 3,683 pension plans that ended. Including those who have not yet retired and participants in multiemployer plans receiving financial assistance, PBGC is responsible for the current and future pensions of about 1,271,000 people.
The maximum pension benefit guaranteed by PBGC is set by law and adjusted yearly. For plans ended in 2006, workers who retire at age 65 can receive up to $3,971.59 a month ($47,659.08 a year). The guarantee is lower for those who retire early or when there is a benefit for a survivor. The guarantee is increased for those who retire after age 65. PBGC also serves a range of customers interested in retirement planning and pension plans.
Pension Benefit Guaranty Corporation Introduction
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