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KJL LAW, Lawyer
Category: Employment Law
Satisfied Customers: 1626
Experience:  Attorney at law Office of KJLLAW
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Good morning, I have worked same company since 1988, at that

Customer Question

Good morning, I have worked for the same company since 1988, at that time they had a pension plan. Just recently a new company has taken over, employee's have been notified that the pension plan will stop the end of May. I am of retirement age now, and there has been talk of a one time pay out of your pension instead of the monthly check. Legally can they give you a one time pay out, or can I retire in the near future and keep the option of a monthly check. I have tried to contact the local HR department as directed but to no avail. Thank you.
Submitted: 1 year ago.
Category: Employment Law
Expert:  KJL LAW replied 1 year ago.
Hello and welcome to Just Answer. No attorney-client relationship or privilege is formed by speaking to an expert on this site, the answers are for general information. By continuing, you confirm that you understand and agree to these terms.A new employer of an old employers can end a pension plan through a process called "plan termination." There are two ways an employer can terminate its pension plan.The employer can end the plan in what is called a standard termination but only after showing Pension benefit Guaranty Corp, (PBGC). They were created by the Employee Retirement Income Security Act of 1974 to encourage the continuation and maintenance of private-sector defined benefit pension plans, and provideThe employer can end the plan in a standard termination but only after showing PBGC that the plan has enough money to pay all benefits owed to participants. The plan must either purchase an annuity from an insurance company (which will provide you with lifetime benefits when you retire) or, if your plan allows, issue one lump-sum payment that covers your entire benefit. It is up to the employer to decide. But before purchasing your annuity, your plan administrator must give you an advance notice that identifies the insurance company (or companies) that your employer may select to provide the annuity. If the plan is not fully funded, which does not sound like the case here, the employer may apply for a distress termination if the employer is in financial distress. To do so, however, the employer must prove to a bankruptcy court or to PBGC that the employer cannot remain in business unless the plan is terminated. If the application is granted, PBGC will take over the plan as trustee and pay plan benefits, up to the legal limits, using plan assets and PBGC guarantee funds.Since your new owner wants to end the plan, your plan administrator must notify you in writing that your plan is ending. You must get this notice, called the Notice of Intent to Terminate, at least 60 days before the "termination" date. If PBGC is terminating the plan, they notify the plan administrator and often publish a notice about the termination in the local and national newspapers.In a standard termination, you should receive a second letter describing the benefits you will receive, called the Notice of Plan Benefits, generally no later than six months after the date proposed for your plan's termination. So it appears that based upon what you told me they are following the law, and under the current law are allowed to pay you out as a lump-sum.I hope this helps with your question.
Expert:  KJL LAW replied 1 year ago.
If you have any additional questions, just ask. If not, please rate the question for tracking and credit. Remember I do not get paid unless you rate the question.
Expert:  KJL LAW replied 1 year ago.
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