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Definition

Pension Benefits Guarantee Corporation (PBGC)

Pension Benefits Guarantee Corporation (PBGC) established under ERISA to ensure that pensions meet vesting obligations; also insures pensions should a plan terminate without sufficient funds to meet its vested obligations.

The PBGG guarantees only defined benefit plans, not defined contribution plans. Furthermore, it will only pay an individual a pension of up to a maximum of about $54,000 per year for someone 65 years of age with a plan terminating in 2009. So, high income workers may still see most of their expected pensions evaporate if their employers go bankrupt.

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