How Do You Spell PBGC?

1. The Pension Benefit Guaranty Corporation (PBGC) is a federal agency established in the United States to protect pension benefits of participants and beneficiaries covered by private sector defined benefit pension plans. PBGC was created by the Employee Retirement Income Security Act of 1974 (ERISA) to ensure that workers who have earned a traditional pension will receive their benefits even if their pension plan fails.

   The PBGC operates as a quasigovernmental entity, separate from the regular federal budget, but still subject to oversight by Congress and the federal executive branch. Its main function is to assume control over terminated pension plans and guarantee benefit payments to the participants up to a certain limit, which is set by law and adjusted annually.

   When a pension plan becomes underfunded or fails, either due to bankruptcy of the plan sponsor or other financial difficulties, the PBGC steps in to take responsibility for the plan's obligations. It pays eligible participants their pension benefits, subject to certain limitations. However, it does not cover certain types of benefits, such as severance pay, health insurance, and other ancillary benefits.

   The PBGC is funded through insurance premiums paid by the sponsors of insured pension plans, investment income, and recoveries from the pension plans it takes over. The agency also has a regulatory role, overseeing the management and administration of pension plans to ensure compliance with ERISA regulations and taking actions to protect the interests of plan participants.

Common Misspellings for PBGC

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