what if my company b(company b bought my company a) files for bankrupt

[Guest nharpist]

i worked for lukens steel for 30 years prior to bethleham steel buying the company out. i have since left the company, but have not yet retired. my pension is frozen, however i get burned by 6% for each year i am under the age of 62; currently 53. my worry is that bethleham will go under. will my lukens pension still be there.

[david rigby]

Not sure if this is a defined benefit (DB) plan or a defined contribution (DC) plan. It sounds like it is a DB plan.

Likely, the 6% per year you refer to is the plan's definition of early retirement reduction. This is common in many plans and is for the purpose of recognizing that a benefit which starts before "normal" retirement will be payable for a longer period of time, hence the monthly amount must be reduced to reflect this longer time.

Your plan may or may not have additional early retirement provisions that would use a different (smaller) reduction for those employees who have at least X years of service. Example, employee may retire early with no reduction if at least age 55 and 30 years of service.

If your plan has something similar, it may not be possible to eliminate it merely by freezing the plan. However, even if that provision still exists, it can be restricted to those who retire from active employment. If you are no longer actively employed there, that provision might not be available to you.

You need to obtain all written documentation. Start with the summary plan description (SPD, sometimes referred to as the "pension booklet"), and any amendment or addendums to the SPD. Then get any written documentation that was provided at the time of buyout and the plan freeze.

Good luck.

[Guest PAUL DUGAN]

Based on your post it appears that you are covered under a defined benefit plan. If this is the case, the bankruptcy of the company will not effect your basic pension benefits. The assets of a pension are completly outside the assets of the company and can not be touched by creditors. It is possible for subsidizes early retirement benefits to be cut back on plan termination but the 6% reduction you indicated would indicate that there are no subsidized early retirement benefits.

If the assets are large enough to cover benefits the plan will continue to pay benefits or if terminated annuities will be purchased from an insurance company which will guarantee the benefit. If assets are not large enough Pension Benefit Guaranty Corp. (a goverment program) will assume the responsibility of your pension. There are maximum benefits insured under PBGC but these limits are quite high and normally only effect the very highest paid employees if anyone.