A private retirement plan can change its rules or terminate at any time. These changes can occur for a variety of reasons: during company mergers, to streamline plan administration, to improve plan features, or to reduce costs.
While private retirement plans cannot change plan rules to reduce benefits that have been earned as of the date of the change, plan rules can be modified to reduce future benefit accruals and contributions.
If a plan terminates, participants are usually entitled to all benefits they have earned. However, if yours is a traditional or hybrid pension plan that ends without enough money to pay all promised benefits, your benefit will be limited to the amount guaranteed by the federal private pension insurance program, the Pension Benefit Guaranty Corporation.
This information only applies to pension and retirement savings plans offered by companies, unions, and nonprofit organizations other than churches. Information about government plans, IRAs, and church plans can be found elsewhere on the Pension Rights Center website.
In this section you can find information about changes to your plan, changes to your employer, when your employer or plan encounters financial problems, and when a plan is terminated.
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