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How PBGC Operates

How PBGC Operates

The Pension Benefit Guaranty Corporation (PBGC) protects the retirement benefits of over 35 million workers and retirees. PBGC operates two separate insurance programs — the Single-Employer and Multiemployer Insurance Programs. For more information on PBGC and the people we help, please visit our Who We Are page.

Money PBGC Takes In and Pays Out

PBGC receives no funds from general tax revenues. Operations are financed by insurance premiums set by Congress and paid by sponsors of defined benefit plans, investment income, and for the Single-Employer Program, assets from pension plans trusteed by PBGC, and recoveries from the companies formerly responsible for the plans.

PBGC pays monthly retirement benefits, up to legal limits, to more than 932,000 retirees in over 4,900 single-employer plans that ended.

PBGC provides financial assistance through loans to failed multiemployer plans so that the plan can pay benefits, up to legal limits, to more than 66,900 retirees in over 80 plans.

How We Invest Our Money

PBGC’s investment policy is established by the agency’s Board of Directors, composed of the U.S. Secretaries of Labor, Treasury and Commerce. The Board has established an investment policy that, for the Single-Employer Program, uses a Liability Driven Investment (LDI) approach. Under that approach, PBGC employs an asset allocation glidepath under which the investment portfolio risk is reduced as funded status improves. The agency’s Multiemployer Program assets are invested solely in U.S. government securities. This investment policy was approved by PBGC’s Board at the April 23, 2019 Board meeting.

Two Pension Insurance Programs

The Single-Employer Program protects about 24.7 million workers and retirees in about 24,000 private-sector, defined benefit pension plans.

  • If a single-employer plan fails and PBGC becomes responsible for it, the agency directly pays benefits due to current and future retirees up to legal limits.

The Multiemployer Program protects about 10.8 million workers and retirees in about 1,400 private-sector, defined benefit pension plans.

  • PBGC does not directly pay benefits in failed multiemployer plans. Instead, the agency provides financial assistance to the plans, which continue to pay current and future retirees up to legal limits.

When PBGC Takes Over Your Single-Employer Plan: What Happens Next

First, we will send you a letter informing you that PBGC is now responsible for your pension benefit. To ensure we have your correct information, we will ask you to complete and return a Payee Information Form.

Next, PBGC will review your plan's records and benefit amount. PBGC must pay benefits according to your pension plan’s provisions and limits set by federal law.

If you are already receiving a pension:

  • You will continue receiving your benefit without interruption during our review.
  • Your PBGC benefit may be less than you were receiving from your plan, because payments are considered an estimate—PBGC’s best calculation of the amount we can pay under federal legal limits.
  • You will receive estimated benefits until PBGC completes an evaluation of your plan, a process that typically takes two to three years.

For all plan participants, whether already receiving a pension or not yet retired:

When PBGC’s evaluation of the plan is completed, we will tell you your final benefit amount and let you know how you can appeal our determination.

If you have not yet retired:

  • Four months before you want to begin collecting benefits, request an estimate. You may also call PBGC’s Customer Contact Center toll-free at 1-800-400-7242 (TTY/ASCII users may call toll-free at 1-800-877-8339).
  • Three months before you want to begin collecting benefits, complete your application by using our online service, MyPBA.

The safest, quickest way to get your money is through electronic direct deposit. PBGC will send your payment on time, every month, directly to your financial institution.

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Additional Resource

Additional Resource
Last updated November 18, 2019