PBGC


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PBGC

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.

References in periodicals archive ?
Towers Watson says this is another step toward refusing PBGC coverage to plans eligible only in Puerto Rico that don't fulfill all the coverage needs.
PBGC director Joshua Gotbaum has pushed back against any attempt by American Airlines to terminate its pension plans, claiming it would saddle his agency with $17 billion in benefit obligations.
In 2004, the American Benefits Council commissioned a study that confirmed that the PBGC's investment policy was flawed and urged PBGC to adopt a more growth-oriented strategy by increasing its investments in higher-yielding fixed income securities and equities.
The PBGC is a federal corporation created under the Employee Retirement Income Security Act of 1974, and it guarantees payment of basic pension benefits earned by members participating in more than 29,000 private-sector defined benefit pension plans.
The PBGC insures the pension benefits of the 44 million Americans covered by private defined-benefit pension plans.
United Airlines workers will absorb the rest of the losses, because the PBGC limits maximum benefits to just more than $3,800 a month - far less than United promised to pay some employees, particularly early-retiring pilots.
Despite the dire warning, Ippolito suggests that, to avert an impending crisis, pension plan underfunding can be controlled by transforming the PBGC into a private insurance program that sets premiums according to the amount of risk plan sponsors add to it.
PBGC Executive Director Steven Kandarian said he expects PBGC "to recover pennies on the dollar," about $200 million of the $2.
The PBGC began paying guaranteed basic benefits to the funds' beneficiaries; however, these benefits were substantially less than the amounts L had been paying under the plans themselves.
Still, the PBGC said about two-thirds of the 55,000 insured plans remain fully funded.
Under section 4010, certain contributing sponsors and all members of their controlled groups (referred to in the regulations and hereinafter as "Filers") must submit annually to the PBGC financial and actuarial information prescribed by the PBGC in regulations.
justifiably) of past and present pricing and benefits pledges by the PBGC.