Definition
The Pension Benefit Guaranty Corporation (PBGC) is a government organization charged with the responsibility of protecting the retirement incomes of participants in private-sector defined benefit pension plans.
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.
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Additional Helpful Information
- PBGC is funded from a insurance premiums that it collects from employers that sponsor insured pension plans, earnings money from investments and receives funds from pension plans it takes over.
- PBGC is headed by a Director who reports to a Board of Directors consisting of the Secretaries of Labor, Commerce and Treasury, with the Secretary of Labor as Chairman.
