Do You Know Whatís Going On With Your Pension Plan?
Thatís a good question, do you know whether or not your pension plan is stable, and if so will it remain that way? Well, if youíre part of your employers pension plan, you should find out the answers to these questions. Once you find out, stay informed about your pension plan. You say you know you have a pension plan but really donít know what this is. A pension plan is a retirement account that your employer contributes funds as part of your future retirement. The amount paid to your retirement fund by your employer is based on the number of years you have worked and the amount of income you have earned. How long will it take for me to become eligible for my employerís pension plan? It is normally between 3-5 years that you become eligible for the plan offered by your employer.
What if I no longer work for the employer after I become eligible will I still be vested? Yes. I hear some employers have terminated their pension plans, why is this? Some employers are finding it very expensive to continue with their pension plans due to: increased number of retirees, low interest rates and instability of the stock market. My employer is terminating our pension plan, how will this affect me? The government agency Pension Benefit Guaraty Corporation will pick up pension payments when the employer defaults. Note, this agency pays a certain amount of your pension benefits on an annual basis. Unfortunately in most cases you will receive less for your annual pension amount then you would normally have received via your employer.
Is there any way to know if my employerís pension plan is in trouble? If your company is showing signs of financial trouble, normally the first thing to go is the pension plan. If you are trying to find out if your employer may be headed for financial trouble consider checking the following: financial news information on your company, newspaper financial section, stock market, business financial magazines and the internet. I just recently found out that an employer I worked for a few years ago just went out of business. How would I find out about the status of my pension plan that I had with this employer, Iíve been unable to contact them directly? If your past or former employer defaulted on itís pension plan, check the Pension Benefit Guaraty Corporation website at www.pbgc.gov to see if this program has taken over the handling of your former employerís plan. Stay on top of your pension plan, by keeping yourself informed of your planís current status. This is important because your pension is part of your retirement for your future! If you donít stay informed about your pension, you may loose valuable funds that are important for your future retirement funds.
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