PBGC Trusteed Pension Plans The Pension Benefit Guaranty Corporation (PBGC) is a federal agency that insures the benefits of more than 20,000 private sector defined benefit pension plans. This type of plan provides a retiree with a monthly payment beginning at retirement for the remainder of the retiree’s lifetime. The benefit payable upon retirement is calculated using a formula. Such formula is defined within the context of the plan. A defined benefit plan is the type of plan most commonly thought of when describing pensions. It is paid monthly for the lifetime of the retiree upon retirement. Because the benefit to be received is defined or "known", it is considered a defined benefit plan. A defined benefit pension plan that does not have enough money to pay benefits may be terminated if the employer responsible for the plan faces severe financial difficulty, such as bankruptcy. When this happens the PBGC becomes trustee of the plan and pays pension benefits based upon its rules and procedures, which are different than the terminated plan.
How to Obtain Participant Information from PBGC

General Questions to be Answered:

  1. Name, address and phone number of the person requesting the order.
  2. Name of the county in which the divorce is taking place.
  3. Name of the court that has jurisdiction over the divorce.
  4. Name of judicial district/circuit/division, if applicable.
  5. Case reference number.
  6. Name, address, date of birth and Social Security number of the employee (participant/member of the plan).
  7. Name, address, date of birth and Social Security number of the employee’s spouse (alternate payee/former spouse).
  8. Reason for order (marital property rights or alimony).
  9. Date of marriage.
  10. Date the marriage ended.
  11. Date of divorce, if divorced.
  12. Date the employee began participating in the plan, if prior to the date of marriage.
  13. Is the employee still employed, terminated or retired?
  14. The exact name of the pension plan.

Additional Questions to be Answered:

    (Explanations are included with these questions)
  1. What was the plan termination date?
  2. What is the form of award to the Alternate Payee (percent or dollar amount)?
  3. If PBGC adjusts the Participant’s benefit after PBGC approves the Order, how will any increase or decrease be applied.
  4. When will the Alternate Payee start receiving benefits?
  5. What form of benefit will the Alternate Payee receive?
  6. When will the Alternate Payee stop receiving benefits?
  7. What happens to the Alternate Payee’s benefits if the Participant dies?
  8. If the Alternate Payee dies prior to commencement of benefits, what happens to his/her share?
  9. Should there be a Contingent Alternate Payee in case the Alternate Payee dies? If so, who is the Contingent Alternate Payee?
  10. . Should the Alternate Payee be treated as the Participant’s spouse for purposes of Participant’s qualified joint and survivor annuity (QJSA)?
  11. Should the Alternate Payee be treated as the Participant’s spouse for purposes of Participant’s qualified preretirement survivor annuity (QPSA)?
  12. Should the Alternate Payee receive a Separate or Shared interest in the Participant’s benefits?

Additional Provisions that will be included in the QDRO:

  1. Savings Clause
  2. What happens to any early retirement subsidy?
  3. Continued Jurisdiction by the Court.

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