Private pensions are one of the two basic forms in which these kinds of retirement plan options can be made available to employees of an organization, with the other basic option being that of a public option, provided to the employees of a governmental agency or department. In this regard, a private pension is administered under the rules of the United States according to rules which apply to any employer outside of a recognized religious organization.
In this regard, the private pension system of the United States, as a widely recognized and, thus, legally protected social safety net of the country, has been administered since 1974 and the passage of the Employee Retirement Income Security Act according to the options offered through the Pension Benefit Guaranty Corporation (PBGC).
The Pension Benefit Guaranty Corporation was created to administer the private pension system toward the main end of ensuring that the plans offered by employers can be realized for the financial benefits of the employees holding those plans. In this regard, private pensions have been provided for being paid out to employees specifically at the age of 65, while a private pension can be altered in the amounts to be paid out when retirement occurs before or after that point.
Despite its governmental basis for protecting private pension plans, the Personal Benefit Guaranty Corporation is not tax-funded. Instead, this aspect of the private pensions system is funded through the individual holdings of different private pensions, as well as the investments made through private pension plans.