ERISA and COBRA Continuation; Defined Benefit Pension Plans
ERISA And Guarantee of Defined Benefit Pension Plans
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ERISA created a fund, known as The Pension Benefit Guaranty Corporation, to guarantee employees that the money due them will be there when needed in case their Defined Benefit Pension Plan falls short.
The fund is similar in concept to the Federal Deposit Insurance Corporation (FDIC) that protects banks' assets for depositors.
Defined Benefit Pension Plans pay an amount like a premium into the Pension Benefit Guaranty Fund based on the Pension Plan's assets.
The fund does not cover any other types of employee plans such as a defined contribution (vs. benefit) plan.
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