WASHINGTON, D.C. – Established on September 2, 1974, the Pension Benefit Guaranty Corporation (PBGC) is celebrating 50 years of safeguarding the retirement incomes of millions of America’s workers, retirees, and their families.
PBGC was created by the Employee Retirement Income Security Act of 1974 (ERISA) and has continued to be a cornerstone in the protection of private-sector defined-benefit pension plans.
“The passage of the Employee Retirement Income Security Act and the creation of the Pension Benefit Guaranty Corporation fundamentally changed the retirement outlook for millions of America’s workers when it was signed, fifty years ago,” said Acting Secretary of Labor Julie A. Su. “Workers no longer have to worry about losing the pensions they earned after a lifetime of hard work if their plan terminates. The protections ERISA enshrined in law and the work of the PBGC ensure that when workers retire, they are able to do so with the savings and benefits that are rightfully theirs.”
Before the enactment of ERISA and creation of PBGC, there was little protection for people covered by private-sector pension plans. ERISA was created in response to a number of pension plan failures in the 1960s, including the collapse of Studebaker Corp., a once-prominent American automobile manufacturer. Studebaker’s financial struggles led to the termination of its employee pension plan, leaving most of the 8,500 workers without the pensions they had been promised.
Fifty years later, PBGC remains committed to serving the customers who rely on us – workers and retirees in covered plans, the employers who continue to sponsor pension plans, and the pension practitioners who support the defined benefit pension system.
“At the heart of PBGC's mission is our commitment to protecting the retirement security of millions of American workers and their families,” said Ann Y. Orr, Acting PBGC Director. “The agency's mission remains as vital today as it was five decades ago: preserving and encouraging the continuation of private pension plans and protecting the hard-earned pension benefits of workers and retirees.”
More recently, the American Rescue Plan Act of 2021 created the Special Financial Assistance (SFA) program to provide funding to severely underfunded multiemployer pension plans and ensure that millions of America’s workers, retirees, and their families receive the pension benefits they earned. To date, PBGC has announced approval of about $67.7 billion in SFA to plans that cover about 1,150,000 workers, retirees, and beneficiaries.
About PBGC
PBGC protects the retirement security of over 31 million American workers, retirees, and beneficiaries in both single-employer and multiemployer private sector pension plans. The agency’s two insurance programs are legally separate and operationally and financially independent. PBGC is directly responsible for the benefits of nearly 1.4 million participants and beneficiaries in failed single-employer pension plans. The Single-Employer Program is financed by insurance premiums, investment income, and assets and recoveries from failed single-employer plans. The Multiemployer Program is financed by insurance premiums and investment income. Special financial assistance for financially troubled multiemployer plans is financed by general taxpayer monies.