The federal corporation guarantees payments for the 44 million American employees who are covered by traditional pensions and many other forms of defined-benefit retirement plans. It is financed largely by insurance premiums paid by employers who offer such plans, investment income and the recovery of money and assets from companies that have abandoned their pension plans.
The PBGC's payouts are capped at certain amounts, depending on the age of the worker and the year in which his or her company abandoned its plan. The PBGC offers an outline of its benefit limits on its website.
LifeWire, a part of The New York Times Company, provides original and syndicated online lifestyle content. David Fisher is a freelance writer based in Bend, Ore. In addition to 25 years as a writer and editor, he has worked as a professional financial adviser.
