Introduction to Pension Benefit Guaranty Corporation - Salaried Video Transcript
Thank you for taking the time to watch this video. We've created it especially for you - a participant in the Delphi Hourly pension plan. Unlike the video you received in the welcome package that provided only general information about PBGC, this video gives you some specifics about how PBGC is administering your pension plan. It tells you what you can expect from us and when, and what we can and cannot do, and will take you through some examples of benefit calculations.
We want to assure you that we are here to help you and to provide you with the best customer service. You can watch the entire video or choose sections that are of interest to you from the menu of topics.
Congress established the Pension Benefit Guaranty Corporation in September 1974, under the Employee Retirement Income Security Act, as a federal corporation to insure the pension benefits of America’s workers. To do so, PBGC administers insurance programs to protect the pension benefits of participants in private-sector defined benefit pension plans.
Most of these plans, like Delphi’s, promise workers a specific monthly benefit at retirement based on age, salary and years of service. The PBGC insures the pensions of 44 million workers and retirees in more than 30,000 defined benefit pension plans.
When a company's pension plan terminates and it is underfunded, PBGC assumes responsibility for paying the benefits. It makes up the pension plan’s shortfall, up to the legal limits, out of insurance funds. The PBGC is currently responsible for the pensions of more than one and a half million Americans in over 4,000 terminated pension plans. PBGC pays retirement benefits based on the provisions of each plan, up to the limits set by law.
We receive premiums from all covered companies that sponsor defined benefit plans, assets from failed plans that we take over, or "trustee", recoveries, or assets from companies that sponsored the pension plan, and investment income generated by the investment of our assets. We do not receive funds from general tax revenues.
There are benefits not covered by PBGC. They are health care benefits; unpaid leave; defined contribution plans, such as 401(k) plans and profit-sharing plans; life insurance and disability benefits for disabilities that occurred after the date of plan termination.