The Pension Benefit Guaranty Corporation is an agency of the U.S. Government that insures and administers defined benefit retirement plans. The Employee Retirement Income Security Act created the PBGC in 1974. Funding is obtained from insurance premiums paid by participating employers, funds from acquired pensions, and investments, explains the PBGC.
Duties of the PBGC, because of ERISA, include minimizing pension insurance premiums while providing timely and uninterrupted payment, and encouraging the continuation and maintenance of private sector defined benefit pension plans, states the PBGC.
The annually adjusted maximum pension benefit is set by law and varies based on age at retirement and survivor benefits, advises the PBGC. The PBCG is responsible for the pensions of approximately 1.5 million employees whose employers are unable to provide them, as of 2015.
The Secretary of Labor serves as the Chairman of the Board of Directors, which also includes the Secretary of Commerce and the Secretary of the Treasury, conveys the PBGC. The U.S. President appoints seven members to an advisory committee intended to represent the interests of the general public, labor and employers. The Senate confirms a Director to head the PBGC, who is appointed by the President.
The PBGC serves customers that include pensioners, employers, federal agencies and the general public. The media, PBGC employees and PBGC contractors are also considered customers of the agency, states the PBGC.