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On 11/29/2002 10:58:58 PM tug_slug wrote:
gogogadget posted this on the "Any thoughts Chip" subject.
Hope it helps
Tug
A company can end a plan on its own ownly if it has enough money to pay all benefits accrued by retired employees and those who are vested in the plan. Retired employees are not affected, but if you are an active employee, you will stop accumulating benefits the moment the plan ends. And your monthly benefit at retirement reflects the number of years you worked and your salary AT THE TIME THE the plan was terminated, even if you continue to work at the company years longer. You won't receive either monthly payment benefits or lump sum, however, until you reach the retirement age specefied in the plan.
The PBCS's maximum payout for a person retiring at age 65 under the single-employer plan may fully cover all people earning roughly less than $115k , under a typical benefit formula. Some early retirees, however, may not find their benefits quite so sweet. If you retire at age 60 instead of 65, for example, your benefit will be capped at a much lower figure.
For multi-employer plans, usually the result of collective bargaining agreements, payments are much much lower.
Whats more, should the business clomate deteriorate, some corporations may go bankrupt or come under intense pressure to terminate their plans. Such an eventuality can affect those already retired and would prevent current employees from collecting any more at retirement than the amount they have already accumulated.
Consumer reports, October 2002 page 11 and 12
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COHIBA REPLIES-
That is not 100% correct...
The pension plan can be terminated under "Distress Termination" if the pension plan's liabilities exceed it's assets. The plan may be terminated if the PBGC determines that it would be required to enable the company to pay it's debts and continue business.