Pension Benefit Guaranty Corporation PBGC

The Pension Benefit Guaranty Corporation (PBGC) is an independent agency of the federal government that was established in 1974 as part of the Employee Retirement Income Security Act (ERISA).

On This Page

Additional Information

The purpose of the PBGC is to ensure that corporate pension obligations will be honored. In the event that a company's pension plan encounters financial difficulty in paying pension benefits to former employees, such as when a company declares bankruptcy, the PBGC will make the payments promised by the plans. However, these payments are subject to certain maximum monthly amounts per employee, based on age and years of service. The PBGC is funded by premiums paid from pension plans.


Related Terms

A pension is an arrangement in which employees are provided with an income during retirement,...

The Pension Protection Act of 2006 is a federal law affecting major aspects of the Pension Benefit...