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 ?
PBGCs Single-Employer Insurance Program, which covers about 26 million participants, continues to improve and last year emerged from a negative net position or deficit for the first time since 2001.
In recent years, Congress has raised the PBGC premiums several times to offset increased spending, most lately by $7.65 billion, through 2025, in the Bipartisan Budget Act of 2015.
The PBGC's new reporting requirement is an attempt to remedy the shortage of data about pension de-risking.
As several large multiemployer plans spiraled toward insolvency, PBGC warned that it would not have sufficient assets in its multiemployer guarantee fund to finance its obligations.
Unlike the Federal Deposit Insurance Corporation (which insures commercial bank deposits) and other federal insurance programs, Congress sets the PBGC's premium rates.
While the Federal Reserve Board's low-interest rate policy "is appropriately designed to help spur economic recovery," Klein added, "it has the perverse effect of undervaluing pension assets, understating the funding levels of employer-sponsored plans and the financial position of the PBGC itself."
PBGC (2009) upheld the PBGC's entitlement to a special termination premium under ERISA.
The complaint also charges that that the sale "undermines Congressional intent to provide American pensioners with a uniform safety net under the auspices of the PBGC."
The PBGC reported that its potential exposure to future pension losses from financially weak companies increased by $57 billion from a year ago to a staggering $227 billion.
If the former policy is not enforced so that pbgc is kept solvent, the approaching cost of the latter course should be disclosed.
Retired Delta Pilots to File Unprecedented Appeal with PBGC. The Delta Pilot's Pension Preservation Organization (DP3, Inc.), a group representing the interests of over 6,000 retired Delta pilots, is preparing to file an administrative appeal with the Pension Benefit Guaranty Corporation (PBGC) aimed at recovering approximately $600 million in lost qualified pension benefits.