If you are already recieving a company pension, can the company reduce your monthly pension payment if the pension fund hits trouble.
2006-09-21 02:36:48 · 5 answers · asked by mr x 2 in Politics & Government ➔ Law & Ethics
As David B says, this is not supposed to happen and you need to consult an ERISA expert and, with others similarly affected, a specialist lawyer.
Usually when you retire the pension funds buys you an annuity from an insurance company. You are then no longer at risk. Annuities are normally funded with long-term bonds, and protected under state law. See, e.g., for NY: http://www.ins.state.ny.us/ogco2001/rg111081.htm
Also under federal pension insurance, existing pensioners get the most protection. Unless your pension is unsually high (in which case you would have your own lawyer and you wouldn't be posting your question here) your pension should be guaranteed.
That is assuming you are in the USA. In which case, start your research here: http://www.pbgc.gov/
If you're in the UK the story may be different, but the point of buying an annuity is the same. UK pension guaranties are quite new and still in a mess. And, like the US counterpart, grievously underfunded. And not applicable to all pensions. Start here: http://www.plainenglish.co.uk/PensionsA-Z.html (In the UK there is an industry-wide arrangement for insolvent insurers (except, until now, Lloyd's), and a new EU directive is being phased in now.)
2006-09-21 02:45:51 · answer #1 · answered by Anonymous · 2⤊ 0⤋
It depends upon the circumstances, and on the pension plan documents.
If you have what's known as a defined benefit plan, then, under ERISA, the benefits may not be reduced. However, in bankruptcy, the Bankruptcy court may allow the company to terminate or freeze the plan.
If your plan is something other than defined benefit, the rules are different.
You should consult a qualified ERISA attorney to discuss the specifics of your plan...unilateral reductions in benefits by companies frequently lead to class action litigation.
2006-09-21 09:41:10 · answer #2 · answered by Anonymous · 1⤊ 0⤋
Absolutely.
Or they can completely cut off benefits.
The pension itself is protected by law, but your company can cut anything "extra" that they like. For example, benefits, certain coverages, life insurance, discounts, etc. My aunt was paid the same amount monthly, however because they cut her health insurance, she had to pay for all of it from her pension checks, thereby reeducing her already-meager pension by $100/month.
2006-09-21 09:43:42 · answer #3 · answered by scribesunlimited 2 · 0⤊ 0⤋
Normally not..The funds are suppose to be guaranteed but who knows anymore
2006-09-21 09:38:26 · answer #4 · answered by dwh12345 5 · 0⤊ 0⤋
unless you have a contract I'm afraid they can
2006-09-21 09:45:30 · answer #5 · answered by Anonymous · 0⤊ 0⤋