Pension Benefit Guaranty Corporation (PBGC)

The Pension Benefit Guaranty Corporation (PBGC) is a United States federal government corporation created by the Employee Retirement Income Security Act of 1974 (ERISA). It is designed to protect pension benefits earned by workers in private-sector pension plans that are at risk of failing due to plan sponsor insolvency, sponsor bankruptcy, or sponsor withdrawal from the plan. The PBGC is self-funded and does not rely on taxpayer dollars. It pays the benefits earned by the participants of pension plans that are terminated due to the sponsor’s inability to meet its financial obligations. It also acts as a guarantor, promising that a company’s pension plan will be paid out regardless of the employer’s financial position. It also provides technical assistance to employers to help them maintain their pension plans, and can issue financial protection services to insurers if a plan becomes severely underfunded.