How To Know if Pensions are Safe

A pension is the only perk that most of us look forward to and rely on post-retirement. It takes years of toiling to accumulate a pension and after retirement, your survival depends on this accumulated pension. How sure are you that your pension is safe? Does this question make you nervous and uncertain? Here are a few steps that you can take to learn how to check that your pension is safe.

• Once your pension is vested (usually after 5 years on the job), you are entitled to the pension even if you quit or if the company discontinues the pension plan. This applies once you meet the eligible age as per the plan.
• Pension eligibility holds good even under circumstances when the organization you work for goes bankrupt. A government body called the Pension Benefit Guaranty Corporation (PGBC) takes charge when private sector undertakings file for bankruptcy and continue to pay the retirement benefits as per limits set by law. In addition to this, do note that your employer has to notify you in writing in case he wants to terminate the plan. You must get a notice called the "Notice of Intent to Terminate" at least 60 days before the proposed termination date.
• If your company is in a financial fix, find out whether your pension is adequately funded by accessing Form-5500 which is required under the federal rules and the Employee Retirement Income Security Act. You can find those documents at freeErisa.com.
• Check whether your pension is under-funded. As per PGBC requirements, your pension plan/fund administrator is required to provide annual reports on funding carried out. You also have a legal right to this information at any time by providing a written request to the fund manager.
• Ask your plan administrator in writing about the funding status of the pension and whether there are any restrictions on lump-sum distributions. Though there is nothing much that can be done on such restrictions, if you're counting on a lump sum payment, make sure you look out for other sources of income too.
• To find out whether your plan is safe or not, visit the Pension Rights Center Web site. Click on the fact sheet and check on the latest status on your pension fund.
• If your company is trying to cut costs by terminating the pension plan and offering you a buy-out, try considering that option. You can take the money and invest it profitably, while you look for another job and another pension!

To summarize the above instructions - keep a tab on all information regarding your pension as frequently as possible and stay well-informed about the latest information which could impact it. You can also seek advice from financial experts on this subject who can help you with managing your pension better.