Pension Benefit Guarantee Corporation

Defined-benefit pension plans. If, in retirement, you receive from your former employer a fixed monthly payment, your pension exemplifies the defined-benefit type. The structure of such a plan makes your employer legally responsible for implementing all of it. It requires the company but not the employee to make a minimum annual contribution, which comes from investments. The employer must make up any investment losses to maintain its annual contribution. It may not end the plan without sufficient assets to provide the promised benefits, and its obligation to continue payments to employees survives bankruptcy. The Pension Benefit Guarantee Corporation, which is wholly owned by the U.S. government, secures payments to employees who participate in defined-benefit schemes. Consequently, participants can never exhaust their benefits while they live, and their spouses may continue to receive pension payments after the participants die. Regular lifetime payments are important features of defined-benefit pension plans, about two-thirds of which disallow lump-sum distributions at retirement (Kehrer, 1995). 

Title I of ERISA primarily addresses employee rights and the protections afforded to employees. The administering agency is the U.S. Department of Labor. Title II is primarily amendments to the Internal Revenue Code and is administered by the Internal Revenue Service. Title III identifies the jurisdiction of ERISA as well as administration and enforcement. The administration of Title III is shared by the U.S. Department of Labor, Internal Revenue Service, and Pension Benefit Guarantee Corporation. Title IV actually creates the Pension Benefit Guarantee Corporation... 

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