PBGC What is the main purpose of the Pension Benefit Guarantee Corporation (PBGC)?
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PBGC What is the main purpose of the Pension Benefit Guarantee Corporation (PBGC)? |
Explanation
PBGC is not supported by the government in spite of being a federal charter. It is rather funded by;
The annual premiums of the corporations that sponsor private pension plans.
Income from assets acquired from terminated pension plans.
Income generated by investments.
Verified Answer
Pension Benefit Guarantee Corporation (PBGC) was created under ERISA to provide insurance on private insurance plans. It is a federal charter that aims to guarantee the receipt of benefits of the private pension plans to the participants. If the private pension plan falls short on the amount of retirement money, PBGC makes up for it by paying the difference. This payment, however, is subjected to a certain maximum limit.
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