Home‎ > ‎

The PBGC Marks Its 40th Anniversary

PBGC Marks Its 40th Anniversary

The Pension Benefit Guaranty Corporation marked its 40th anniversary on September 2, 2014. THE PBCG serves as a financial backstop for our nation’s workers and retirees as well as provides federal protections for retirees' pensions.

The PBGC was created on September 2, 1974, resulting from the passage of ERISA. On that day President Gerald Ford announced, “Today, with great pleasure, I am signing into law a landmark measure that may finally give the American worker solid protection in his pension plan.”

On the first day the PBGC opened its doors, it already had hundreds of cases to review. The agency paid out its first check in less than six months to a member of the International City Bank of New Orleans Employees Retirement Plan.

Also, as a result of ERISA and the establishment of the PBGC, Congress passed and President Jimmy Carter signed the Revenue Act of 1978, which established deferred compensation plans (401K plans) where employees are not taxed on the portion of income they elect to receive as deferred compensation rather than direct cash payments. The Act also established flexible spending accounts.

Share This Article: