Pension Benefit Guaranty Corporation (PBGC)

The Pension Benefit Guaranty Corporation (PBGC) is a government body established by Title IV of the Employee Retirement Income Security Act of 1974 (ERISA) to insure payment of pension plan benefits when plans are terminated. A pension program is any program that has been established in which a worker earns a benefit that will provide income during retirement. One form of pension is the defined-benefit program in which an employer promises to pay a future benefit, which is defined by a formula in which the pension benefit is based on the employee’s pay and years of service. Prior to ERISA, there was no oversight of pension plans and no requirements to fund the promise of future benefits. This situation led to many abuses and situations ...