Are there rumors your company might go bankrupt? Do you have a pretty good pension with them since you have been there a fairly long time? Should you be worried and are there any steps you can take? These are all questions you may be asking yourself during tough economic times.
The first bit of good news is that in the event your company goes bankrupt, 84 percent of retirees end up with their full pension. If your company is in the United States every defined-benefit retirement plan is insured to a point. Most employees will receive all or most of their pension in the event of company bankruptcy. Why is that?
Because when a company files bankruptcy a federal agency jumps in to control the pension plan on behalf of the employees. It is like an insurance plan for pensions. The pension plan is usually terminated in reorganization and always terminated in liquidation. So, then what happens? The Pension Benefit Guaranty Corporation (PBGC) will take over making payments.
Employees with the largest pensions may actually lose since (PBGC) maximum annual payment is $54,000 a year for workers who retire at age 65. Each year is adjusted for inflation.
So, if your company may be on the verge of bankruptcy, whether for reorganization or liquidation, you should contact the PBGC and discuss your options. Bookmark their website and check for updates. Hopefully, you will not be in that 16 percent that loses everything.
By Jerry Mohr for the 50 Plus Report