Meanwhile, newer workers, particularly those who have less than five years vested in a pension plan, are less likely to receive a piece of their pension pie since a growing number of employers have locked new employees out of pension plans.

Moreover, plans paid out by the feds due to a company bankruptcy are paid out on a scale. Pension payments for retirees aged 65 and older are capped at $54,000 per year, according to information on the PGBC’s web site. Those who retire at 60 get $35,100 and people who retire at age 55 get $24,300 annually.

This scale, however, only represents the maximum benefit. Factors such as the health of the company at the point when the plan is terminated can reduce the amount of your benefit. 

What You Can Do to Protect Yourself
Unlike a 401(k) plan, in which you can decide how your money is invested, traditional pension plans are overseen by an administrator. Don’t expect to have much of a say in where that money goes.

If you’re interested in knowing how your plan is doing, there are a four things that you can do right now:

1. Contact your  plan administrator. Generally, your employer doesn’t have to tell you anything about your pension’s performance. However, if the plan is underfunded for any reason, the plan administrator is legally bound to tell you.  Call your company to find out if an edification has been sent recently and ask about the health of the plan.

2. Look for your plan’s 10-K statement. Plan administrators have to submit a report on the plan to the SEC every year. Go to the Filings & Forms section of the SEC’s web site and look for the company’s 10-K filing. The filing will tell you whether or not your plan is underfunded and explain why.

3. Talk to your union. Pension benefits are going to come up in any collective bargaining between a company and the union. You can contact your union representative to find the latest information about the status of your benefits and if there have been any changes.

4. Know your rights. The U.S. Department of Labor estimates that only 20% of private sector workers have pension plans, but that doesn’t mean that pensioners’ complaints go ignored. The Pension Rights Center in D.C. specializes in providing retirees with counseling and information about their pension benefits.  You can reach them by phone at (202) 296-3776 or visit their web site.

 

 

—For the best rates on loans, bank accounts and credit cards, enter your ZIP code at BankingMyWay.com.