PBGC

See: Pension Benefit Guaranty Corporation

Pension Benefit Guaranty Corporation

A non-profit corporation under the United States Department of Labor guaranteeing the pensions of some private companies. Established in 1974, it is designed to take over the pensions of participating companies should they become insolvent. It does not derive its revenues from taxation; rather, it collects premiums from participating companies as if it were an insurance policy. It was not designed to protect bankrupt companies; rather, it exists as part of a social safety net for former employees of these companies. It is headed by a Director, who is appointed by the U.S. President upon confirmation of the Senate.

Pension Benefit Guaranty Corporation (PBGC).

The PBGC was created to ensure that participants in defined benefit pension plans under its jurisdiction will receive at least a basic pension if the plans are terminated because they're underfunded and so unable to meet their obligations.

The maximum benefit is adjusted each year for plans terminated in that year to reflect increases in Social Security.

Covered plans, which include those with 25 or more participants, must pay annual premiums to the PBGC to help fund this federal corporation.

The PBGC also tries to find people who participated in, and are due benefits from, plans that are no longer operating.