440-484-5566

Home » Blog » IRA Investing » 6 Ways to Protect Your Pension Benefits
A street sign that says retirement lane.

6 Ways to Protect Your Pension Benefits


Last week we wrote about the pension funding gap. This week we’ll discuss how to protect the pension benefits you’ve accrued already.
Many people have come to view pension plans and Social Security as benefits that can’t be relied upon, and retirement programs sponsored by workplaces across the country are disappearing rapidly. However, just because news is bad on a national scale doesn’t mean your personal financial situation has to deteriorate, too. Getting more involved in your retirement financial planning is the first, most important step to protecting your pension and retirement benefits.

Here are some points you can look to in determining the health of your retirement portfolio:

  1. Funded status of the plan: This is the ratio of assets that the plan has on hand to meet its future pension obligations. A ratio of 80 percent or higher means the plan is healthy, although higher-funded ratios are optimum
  2. Ask for an annual funding notice: Get reports of the financial conditions of your plan. For private plans, your provider is legally required to provide you with one a year. This funding notice includes information about the ratio and other conditions of the plan. You may need to seek evaluation from a financial advisor, as some are very technical.
  3. Ask for a plan statement: If you are currently working, ask for a statement showing the vested retirement benefits you’re entitled to receive when you retire. Once a benefit is vested, the plan is legally required to pay it. Therefore, looking at a statement is a great indicator of what you have in your current pension.
  4. Lock into a lifetime monthly pay out: Even considering worries about the long-term solvency of pension plans, most advisors recommend taking monthly payments as opposed to a one-time pay out. Rest assured, too, because the federal Pension Benefit Guaranty Corporation ensures private plans.
  5. Check with the Public Funds Survey: Larger public plans are part of the Public Funds Survey. The Survey tracks the performance plans that provide pensions to about 80 percent of all public employees, so chances are you can get information about your plan.
  6. Take a cumulative view: State and local plans publish annual financial reports each year. Look at reports from years past to develop an idea of growth and performance over the long term.