Clara V. from West Fargo, ND asks, "What if my Pension Plan or Retirement Account is terminated?"
Pension Evaluators & QDROS Of Troyan, Inc Associates Group answers, "Generally, your pension assets should not be at risk when a business
declares bankruptcy because ERISA requires that promised pension benefits
are adequately funded and that pension monies be kept separate from an
employer's business assets and held in trust or invested in an insurance
contract. Thus, if an employer declares bankruptcy, the retirement funds
should be secure from the company's creditors. In addition, plan fiduciaries
must comply with the ERISA provisions that prohibit the mismanagement
and abuse of plan assets. If contributions to a plan have been withheld
from your pay, you may want to confirm that the amounts deducted have
been forwarded to the plan's trust or insurance contract.
In addition, some pension benefits may be insured by the federal government.
Defined benefit plans are protected by the Pension Benefit Guaranty Corporation
(PBGC), a federal government corporation. If a plan is terminated because
an employer has financial difficulty and cannot fund the plan, and the
plan does not have enough money to pay the promised benefits, the PBGC
will assume responsibility for the plan. The PBGC pays benefits after
termination, up to a certain maximum guaranteed amount. On the other hand,
defined contribution plans, such as 401(k) plans, are not insured by the PBGC.
In the event the pension plan is terminated, the plan must vest your accrued
benefit 100 percent. This means that the plan owes you all the pension
benefits that you have earned so far, even benefits you would have lost
if you had voluntarily left your employment. You should review the summary
plan description for the plan rules regarding payment of benefits. Also
remember that taking a distribution of pension benefits before retirement
may have important tax consequences. You may need to consult with a tax
advisor before accepting the distribution.
If your retirement plan is a defined benefit pension plan, all or a portion
of the benefits may be insured by the Pension Benefit Guaranty Corporation
(PBGC). For further information contact the Pension Benefit Guaranty Corporation,
Administrative Review and Technology Assistance Department, 1200 K Street,
NW, Washington DC 20005. The telephone number is (202) 326-4000."
Pension Evaluators & QDROS Of Troyan, Inc Associates Group QDRO Consulting
offers expert QDRO outsourcing services to divorce attorneys and mediators,
as well as retirement plan administrators.
Divorce attorneys/mediators – You can rely on Pension Evaluators & QDROS Of Troyan, Inc
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here to begin the process to begin the application process forms on this site
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with our QDRO experts at 800-221-0706 and reference the state for your
Divorce matter for discussions.