The Pension Benefit Guaranty Corporation (PBGC) is a federal government agency that provides financial protection to millions of retirees and their families. It is an independent agency established by the Employee Retirement Income Security Act (ERISA) of 1974.
The PBGC is the country’s largest insurer of defined benefit pension plans, which are typically offered as part of an employer’s retirement package. In order to be covered by the PBGC, employers must register with the agency and pay a premium.
The primary purpose of the PBGC is to ensure that even if a pension plan fails, the participants in the plan still have money for retirement. The PBGC does this by contributing to the pension plan, guaranteeing that pensioners will get at least a portion of their promised benefits, even if the plan can’t pay. If an employer cannot pay promised benefits, the PBGC pays the pertinent benefits up to certain limits.
Reform of the Pension Benefit Guaranty Corporation
Congress has enacted several legislative changes over the years to shore up the financial stability of the PBGC. These include measures to strengthen the funding of pension plans, increase premiums for plans that are underfunded, and increase oversight of plan sponsors. In addition, the Pension Relief Act of 2010 allowed companies to extend their pension contributions well beyond the current maximum, providing additional money for plan funding.
The PBGC’s mission is to provide protection for workers and retirees when their employers cannot meet their pension obligations. The agency helps ensure that retirement security is preserved for workers and retirees throughout the United States. By maintaining the financial stability of the PBGC, we can ensure that retirement benefits are guaranteed for generations to come.