Pension benefit guaranty corporation(PBGC) is responsible for protecting private plans pension benefits. This federal agency ensures the security of clients’ pension plans such that if the clients do not receive sufficient pension, they compensate them up to the limit set by the law. PBGC is mainly funded by investments, time, assets of pension plans taken as trustee, and the insurance premiums paid by companies (Broeders & Chen, 2013). They ensure protection over insurance plan regardless of whether the employer pays the required dividends.
PBGC agency imposes rules on the employers as provided by the employment security act. This act outlines rules and regulation to the employers’ concerning their interactions with the employees concerning retirement plans. For instance, ERISA holds that every employer must meet minimum funding standards for a particular year. This applies to the single and multiple employers. It is known as the retirement plan normal cost fund. The act establishes new rules to determine whether the benefit plan has been funded fully. It also outlines the regulation on contribution required to fund the benefit earned by plan participants and the contribution to top up to the benefit plan if the previously earned benefits are not fully funded. Besides, the employers are also required to amortize any pension cost-benefit given to the workers when no finances were paid for the past services. Additionally, the agency requires all employes to develop comprehensive record management of the employees’ information. These employees details include a job description, code of conduct, a signed agreement between the employer and the employees and the work history.
In conclusion PBGC insures the retirement income of many American workers in private sectors which defined benefit pension plan. The benefit plan provides retired employees with specific benefits per month based on the salary and the years of service. Further, the urgency has a set of rules that require both the single and multiple employers to comply with for enrolment. They ought to provide all the details of their employees and must meet minimum funding standards for a particular year.