Changes to Retirement Plans

Company and union retirement plans are voluntary. This means that employers are not required to provide a plan. However, once they set up a pension plan or a 401(k), 403(b) or other retirement savings plan, they are required to follow certain rules required by the federal private pension law, the Employee Retirement Security Act, called ERISA. For instance, they have to allow you to earn the right to a retirement benefit after working a certain number of years, provide you with important information about your benefits, and offer a process for you to challenge the denial or miscalculation of your benefits, among other important rights. The rules for government and “church” plans are different and are not discussed here.

With some exceptions, the law generally prohibits retirement plan changes that affect the benefits you’ve already earned. However, changes in plans are permitted going forward. For example, employers and plan trustees may decide to change their retirement plans by reducing the level of benefits that you can earn in the future, or they may freeze the plan for new employees, not allowing them to earn benefits under the plan. Or they may stop a plan or merge two retirement plans. When employers go through a “restructuring” (for example, they buy or sell a division) it is possible that a totally new company could take over a retirement plan and a portion of the benefits you had counted on receiving will not be paid.

Learn more about this issue

Click on the headings below to see more information.

Employers may decide to “derisk” a pension plan.
Companies are allowed to stop their retirement plans at any time.
Companies can freeze their pension plans.
Companies can stop making matching 401(k) contributions.
Companies can change plan rules for the future.
Certain financially troubled plans can change their rules to reduce promised benefits.

Changes to Retirement Plans Highlights:

Fact Sheets and Issue Papers
09/17/15 |Pension Rights Center

Companies that have transferred pensions to insurance companies

Fact Sheets and Issue Papers
09/17/15 |Pension Rights Center

Companies That Have Changed Their Defined Benefit Pension Plans

The Latest on Changes to Retirement Plans:

Blogs & Newsletters

PRC urges additional consumer protections when employers unload pension liabilities

Should the U.S. Department of Labor’s (DOL) rules be strengthened to better protect workers and retirees when employers unload their pension responsibilities in so-called “de-risking” transactions? That was the question asked and addressed during an all-day hearing July 18 convened by DOL’s ERISA Advisory Council. Norman Stein, PRC’s Senior Policy and Legal Counsel who testified […]

Press Release

PRC Urges IRS to Protect Spouses

The Pension Rights Center (PRC) filed comments with the IRS/Treasury Department today urging the agency to strengthen – not weaken – critical legal protections for spouses’ retirement security.     In its letter, PRC registered its strong disapproval of an IRS proposed rule that would eliminate the long-standing requirement that a spouse can only sign away their […]

Comments & Letters

PRC Comments to IRS on Physical Presence Requirements

The PRC filed comments with the IRS registering its strong disapproval of a proposed rule that would eliminate the long-standing requirement that a spouse can only sign away their right to a survivor’s benefit knowingly and voluntarily in the physical presence of a notary or plan official in order to safeguard against fraud and coercion […]

PRC In the News

The truckers’ triumph: The incredible story of how a scrappy group of blue-collar retirees rescued their pensions

‘I had to get this fight done no matter what’: It took retired trucker Mike Walden nine years, but reinstated benefits recently started flowing to multiemployer pension participants across America.

PRC In the News
11/10/20|Comstock's Magazine

Transfer of Power

In March, Truckee-based Mountain Hardware and Sports was up against the toughest test of its 43-year record of no layoffs. As the economy was going into a deep freeze, company president Doug Wright sent a letter to his staff on March 17.

PRC In the News

How to Choose Between a Pension and Lump Sum Payout

In the midst of a COVID-19-induced sales slump, Honda recently offered early retirement to some of its U.S. workers 55 and older.

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