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Author: vselzer Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 76397  
Subject: Defined Benefit Pension Plans Date: 10/6/2000 1:30 AM
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I know that companies offering Defined Benefit Pensions have government oversite as to funding levels, etc. As someone who is now nearing actual retirement under such a plan, I am wondering what safeguards or protections I will have once I actually select an annuity and my company funds same within an insurance company or other entity offering such annuities. What are my risks of receiving zero after a short period of time?
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Author: bhirs Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 25329 of 76397
Subject: Re: Defined Benefit Pension Plans Date: 10/6/2000 10:50 AM
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<<I am wondering what safeguards or protections I will have once I actually select
an annuity and my company funds same within an insurance company or other entity offering such annuities. What are my risks of
receiving zero after a short period of time? >>

I'm going to assume that you are covered under a qualified plan. (Not a supplemental executive plan )

If you elect to receive a life annuity, you will receive payments until you die. If your company goes out of business, the PBGC (Pension Benefit Guarantee Corporation) will assume the responsibility of your benefits. Your company pays an insurance premium every year to the PBGC to guarantee your benefit.

If your company terminates its pension plan, it will buy annuities from an insurance company to cover your benefits. If the insurance company goes out of business, your annuity is covered by the state guaranty association in which the insurance company is located.

So, to answer your question, the risk of receiving zero in a short period of time is very small, as there is much protection from that happening.

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