Pension Benefit Guaranty Corporation

Underfunded pension plans give PBGC the heebie-jeebies. The Pension Benefit Guaranty Corporation, or PBGC -- itself operating at a multi-billion-dollar deficit -- was set up to promote the growth of defined-benefit pension plans, provide payment of retirement benefits, and keep pension premiums as low as possible. The government agency protects the pensions of more than 34 million workers and monitors employers to ensure that plans are adequately funded. The agency receives no tax funds; its income is generated by insurance premiums paid by employers, investments, and assets recovered from terminated plans. The corporation was created by the Employee Retirement Income Security Act of 1974.

Insurance premiums paid by employers go into two programs: single-employer (about 28,800 pension plans) and multi-employer (some 1,500 pension plans under collective bargaining agreements that involve several unrelated employers). Employers pay about $8 per employee in the multi-employer plans and about $31 per employee for single-employer programs (plus a flat fee per $1,000 of unfunded vested benefits in underfunded plans).

PBGC terminates pension plans when it determines that a company can no longer pay benefits; it can take a portion of a company's assets to ensure that pension obligations are met. When PBGC takes over a failed plan, it pays each individual pensioner covered by the plan monthly payments.

Many companies have moved from traditional defined benefit pension plans to so-called defined contribution plans, usually reducing the benefits of long-time workers in the process. Workers and their advocates criticize the switched plans, but they don't come under PBGC's jurisdiction unless they fail.

The corporation is lead by a director who is appointed by the US President. Joshua Gotbaum was appointed in mid-2010 to replace a retiring Charles Millard.

 

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Pension Benefit Guaranty Corporation


1200 K St Nw
Washington, DC 20005-4026
Phone: 1 (202) 326-4000
Fax: 1 (202) 3264153
www.pbgc.gov

STATS


  • Employer Type: Government Agency
  • CFO: Patricia Kelly
  • Chief Management Officer: Alice Maroni
  • Chief of Staff: Ann Orr

Major Office Locations

  • Washington, DC

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