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I'm about to pull the trigger on retirement and am vested in both a 401(k) plan and a defined benefit pension plan. I have to decide whether to take 1) a monthly payment or 2) a lump sum from my company's defined benefit pension plan.

The monthly payment option concerns me due to the possibility of the company defaulting on payments at some point in the future. I might be better off to take the lump sum and manage the money myself.

Can anyone help me with the following questions:
 Is it a common occurance for companies to default on payments to retirees from defined benefit pension plans?
 Are there any recent examples of publicly traded companies that have defaulted on such payments?
 Are defined benefit plans insured by the government? If so, what agency offers coverage?

Thanks for your help!
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The Pension Benefit Guaranty Corporation (PBGC) protects the retirement incomes of more than 43 million American workers in nearly 38,000 private defined benefit pension plans.

PBGC is a federal agency created by the Employee Retirement Income Security Act of 1974 (ERISA) to insure and protect pension benefits in defined benefit plans. If your plan ends without sufficient money to pay all benefits, PBGC's insurance program will pay you a benefit. PBGC's financing comes mainly from insurance premiums paid by companies whose plans we protect, not from taxes. Your plan is insured even if your employer fails to pay the required premiums.

The easiest way to find out if your plan is covered by PBGC is to ask your employer or the plan administrator. Although PBGC insures most defined benefit plans, some are not covered. For example, plans offered by professional service firms (such as doctors and lawyers) with fewer than 26 employees, by church groups or by federal, state or local governments usually are not insured.

You can check out PBGC's web site at

Hope this helps,

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