Often times, people don't know what the Pension Benefit Guaranty Corporation (PBGC) is, or what we do. Unfortunately, many find out about us when we have to assume responsibility for their pension plans either by way of company bankruptcy or the company's inability to pay retirement benefits.
A quick history lesson: On September 2, 1974, President Ford signed the Employee Retirement Income Security Act (ERISA), creating a federal pension insurance program and an agency — the Pension Benefit Guaranty Corporation — to run it. The agency was created to encourage the continuation and maintenance of private-sector defined benefit pension plans, provide timely and uninterrupted payment of pension benefits, and keep pension insurance premiums at a minimum.
Now that you know how we got started, we'd like to tell you a little about how we operate.
As our director Josh Gotbaum likes to put it, PBGC is similar to the FDIC, but instead of protecting depositors of insured banks, we protect pensions.
FACT: We protect the retirement incomes of more than 44 million American workers in more than 27,500 private-sector defined benefit pension plans.
So, what's a defined benefit plan?
FACT: A defined benefit plan provides a specified monthly benefit at retirement, often based on a combination of salary and years of service.
FACT: We are not funded by general tax revenues.
So, how is the revenue generated?
FACT: We collect insurance premiums from employers that sponsor insured pension plans, earn money from investments, and receive funds from pension plans we take over.
Visit our Web site to learn more about who we are and how we operate.
Recently, Business Insurance cartoonist Roger Schillerstrom published a montage of illustrations chronicling some of the highs and lows in the world of pensions over the past decade.
Our communications team also decided to document the agency's history by adding a cool new feature to the Facebook page - a photo movie. With pictures from day one, it highlights important milestones and behind-the-scenes efforts that protect America's pensions.
It's another short and simple way of telling our story.
Check out our Facebook movie timeline.
Photo Credit: Roger Schillerstrom, Business Insurance
Photo Caption: After the PBGC opposes American Airlines' plan to terminate its pension plans, the airline backtracks and agrees to freeze the plans instead, sparing the PBGC from what would have been its biggest-ever loss.
PBGC Director Josh Gotbaum recently returned from the 3rd Annual U.S. Investment Management Awards where he was honored by Institutional Investor magazine with its Outstanding Contribution Award. The magazine selected Gotbaum "for the important work he’s doing to protect the future of defined benefit plans and their beneficiaries."
In an article on the magazine’s website, writer Frances Denmark says Gotbaum has become "a national voice calling for new forms of defined benefit plans" and notes his forceful efforts to preserve pensions at American Airlines.
Read the full article on Institutional Investor website.
We’ve got a couple of good reasons to be proud these days. First, PBGC people opened their hearts and wallets to again exceed the agency’s goal in the recent Combined Federal Campaign. More than $257,000 was raised for more than 4,000 local, national and international charities. Second, the video that promoted the campaign was one of two honored for excellence among all federal agencies.
You can view the winning video: PBGC Video on YouTube.