The Pension Benefit Guaranty Corporation (PBGC) is a little-known but important federal agency that provides INSURANCE guarantees for private, defined-benefit RETIREMENT PLANs. The PBGC was created by the EMPLOYEE RETIREMENT INCOME SECURITY ACT of 1974 and is financed primarily from insurance premiums paid by companies whose retirement plans they insure. Until the 1990s, many U.S. CORPORATIONs (and government agencies) provided defined-benefit retirement plans. Defined-benefit plans offered employees fixed, monthly retirement INCOME, usually based on an employee’s salary and number of years of service. Employers set aside funds and collected contributions from employees to provide for future payments to retirees and their beneficiaries. Many of these employer-sponsored funds flourished during the 1990s’ growth in the U.S. economy. Some employers used excess funding in retirement funds to finance other business activities. During the 1970s, some employers’ underfunded retirement plans or pension plans were poorly managed, and if the company went bankrupt, employees and retirees faced the loss of their retirement income. The PBGC was created to protect the retirement income of private-sector workers in defined-benefit programs. Retirement plans for many small companies (fewer than 26 employees), professional-service firms (doctors and lawyers), and nonprofit organizations are usually not insured by the PBGC. As more and more companies move away from defined-benefit to defined-contribution plans (employers and employees set aside fixed percentages of their income into a 401(K) PLAN or other retirement fund), the PBGC’s role has decreased.