In the wake of the recent bankruptcies filed by such mega corporations as General Motors and Chrysler, the topic of pension plans and their safety in the midst of a business going under, has been widely discussed. The fact is that in most cases, bankrupt companies will honor the pensions that their employees hold. Providing further peace of mind to those who are concerned about the sustainability of their company and how it affects their pension, there is the Employee Retirement Income Security Act. Passed in 1974, ERISA is a federal law that protects individuals and their health plans and pensions to a certain amount.
More Information on Traditional Pensions
Most companies have their pensions insured by the Pension Benefit Guaranty Corporation (PBGC).
Since pension belongings are not directly connected to the company's general assets, a bankruptcy business may have a pension plan that is paid in full.
84 percent of pensioners whose companies have relinquished their pensions to PBGC end up receiving their pension in full when it's all said and done.
Know Your Rights and Be Informed
Just about every working man and woman out there places a fantastic deal of importance on their pension. If you have worked hard all your life for your pension or retirement plan then you'll not want your company's poor financial choices ruining your golden years. If you are concerned about the sustainability of your company and how that may or may not affect your difficult earned pension then speak up! Brush up on your knowledge of ERISA and PBGC and speak with your employer directly about your rights and your pension.
