retirement

Your pension when the unexpected happens

What if your company folds before you retire?
What if your company folds before you retire?? © Lisa S./Shutterstock.com

Don't assume the worst. "A bankruptcy doesn't mean a pension plan automatically comes to PBGC," says J. Jioni Palmer, senior adviser and director of public affairs at the Pension Benefit Guaranty Corp., which sometimes takes over plans. "We work with businesses to help them keep their plans going," says Palmer.

Attorney Jeffrey R. Capwell, practice group leader for the employee benefits group at McGuireWoods law firm, says the PBGC doesn't just work with employers -- it pushes, shoves and insists that a bankrupt firm meet its pension obligations.

Defined benefit pension plans are a cash drain, which is why companies facing bankruptcy are inclined to turn them over to the PBGC. But because of the PBGC's aggressive approach, Capwell says that if the company is sold or reorganized, the plan will remain in place and viable.

"The PBGC has a whole arsenal of legal powers and tactics available to it, and it gets actively involved with companies when they are in an early warning stage before they declare bankruptcy. This is an agency that is very active in monitoring plans. It isn't an agency that wants to be in the business of assuming plans," Capwell says.

advertisement

Show Bankrate's community sharing policy
          Connect with us
MORTGAGE HOME EQUITY AUTO CDs CREDIT CARDS
Product Rate Change Last week
30 year fixed 4.24%  0.04 4.20%
15 year fixed 3.30%  0.12 3.18%
5/1 ARM 3.42%  0.06 3.36%
 
View Rates in your area Next
Product Rate Change Last week
30K FICO-based HELOC 4.29%  0.01 4.28%
50K FICO-based HELOC 4.04%  0.01 4.03%
100K FICO-based HELOC 3.89% --0.00 3.89%
 
View Rates in your area Next
Product Rate Change Last week
60 month used car loan 2.79% --0.00 2.79%
48 month used car loan 2.98% --0.00 2.98%
60 month new car loan 3.24% --0.00 3.24%
 
View Rates in your area Next
Product Rate Change Last week
1 Year CD 0.95%  0.04 0.91%
2 Year CD 1.15%  0.04 1.11%
5 Year CD 1.75%  0.05 1.70%
 
View Rates in your area Next
Product Rate Change Last week
Balance Transfer Cards 15.77%  0.01 15.78%
Cash Back Cards 16.48% --0.00 16.48%
Low Interest Cards 10.96% --0.00 10.96%
 
Next
advertisement
CD & INVESTING NEWSLETTER

Learn the latest trends that will help grow your portfolio, plus tips on investing strategies. Delivered weekly.

Blog

Jennie Phipps

4 steps that beat clipping coupons

Smart strategies for retirement savings will make a bigger difference than nickel and diming your spending in retirement.  ... Read more

advertisement
Partner Center
advertisement

Connect with us