retirement

Your pension when the unexpected happens

What if the PBGC takes it over?
What if the PBGC takes it over? © NAN728/Shutterstock.com

In dire circumstances, the PBGC steps in to take over a company's pension obligations. Don't panic. "Last year, we assumed responsibility for more than 57,000 additional workers and retirees in 134 failed plans. No one ever misses a payment, and about 85 percent of the retirees we pay get their full benefit," says Palmer.

In 2013, the maximum monthly benefit the PBGC will pay for a worker retiring at 65 is $4,789.77.

If the PBGC takes over your plan, you will be asked to confirm the information that it has on file about you. While it reviews your records, any pension benefits you are currently receiving will be continued.

At the end of the review, you will see no changes unless the PBGC decides the benefits it will pay are less than what you are currently receiving. In that case, your payment will be adjusted, but the annuity form you chose at retirement will stay the same. For instance, if you chose a 50 percent joint and survivor annuity, the money would still be split that way.

If you are still working when the PBGC takes over the plan, then four months before retirement, you must apply directly to the PBGC to begin payments. The PBGC's customer service number is (800) 400-7242.

Benefits are generally paid by direct deposit, with paper checks available under limited circumstances.

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