Although the federal government's Pension Benefit Guaranty Corporation (PBGC) has been providing pension insurance for nearly 30 years, the agency's financial situation has been particularly volatile over the past decade and has deteriorated significantly during the past several years. At the end of 2000, the total value of assets held by PBGC exceeded the estimated present value of its liabilities by $10 billion. But by the end of 2004, the agency's estimated liabilities were $23.5 billion more than the value of its assets. As attention focuses on that situation, the Congressional Budget Office (CBO) has prepared this paper, which aims to provide a basic understanding of federal pension insurance, the operations of PBGC, and the financial condition of and the outlook for the agency over the next 10 years. In accordance with CBO's mandate to provide impartial analysis, the paper makes no recommendations.