Pension Benefit Guarantee Corporation (PBGC)

The federal government insurance agency, called the Pension Benefit Guarantee Corporation (PBGC), insures the funds of defined benefit plans. The PBGC does not guarantee that the pension is as large as if the company remains solvent. If the company you worked for with a defined benefit plan goes bankrupt, the PBGC takes over benefit payments — but only to a certain limit ($36,000 a year in 1999).

Defined benefit plans are the only type of retirement program insured by PBGC.

Each year the PBGC issues a list of insured defined benefit plans that are most behind in their contributions to the pension funds they promised to their employees. Check out the PBGC Web site at www.pbgc.gov for more information.

Pension Benefit Guarantee Corporation is not funded by public tax revenue. Their fund’s source are coming from:

* Sponsors Insurance Premiums or coming from defined benefit pension plans
* Several assets and properties own by pension plans. These assets are the result of takes over or purchases.
* Reimbursement for project sponsors unfunded pension Bankruptcy Project and Real Estate
* Yields income as result of investment.

PBGC currently pays retirement benefits to about 631,000 pensioners in 3800 put an end to welfare every months. Including those responsible are not yet retired and participants in multiemployer plans, the PBGC’s financial support for current and future pensions of about 1.3 million people.

Pension Benefit Guarantee Corporation on a regular basis modify investment scheme. In 2004, it has chosen to invest heavily in bonds. Under new leadership, the Agency has made a substantial part of its assets in shares. Due to reduced market equity investments PBGC has lost 23% in the year to September 30, 2008.