What is an uncovered pension plan?

The soil plan is a pension plan established by a company that guarantees a paid dollar amount per month based on the number of years when the employee worked with the company. Employees usually have to work for 20-30 years before they can receive a pension. Employees contribute to their retirement or take a slightly lower wage so that they can collect the pension later. This also means that the contributions of current employees are used to pay the pension of current pensioners. This may be a dangerous situation for a person who collects a pension from a pension plan. If the company happens something or current contributions to a decrease in the plan, or if the workforce is reduced, the company has no way to continue making pension payments.

Another problem is that the current employee of the Contsses of an uncovered pension plan does not have to provide their own pensions or retirement. Moreover, today's employees can finance many pensions for others depending on how many pensioners exist.If there are more pensioners than employees in the company, the company can break an uncovered pension plan because it can owe much more annual retirement payments than they collect from current workers.

Unfortunately, if the company becomes insolvency insolvency, use the collection from the uncovered pension plan. Employees, if they qualify at an age, can be able to collect a higher amount of social security payments, but it is usually not enough to create a difference between what they would receive from their retirement. Several large companies that collapsed have left employees to face a difficult selection because they left pension plans. After taking over, most of their working life, which will receive a pension, these former and current employees suddenly face any retirement, because no money has been postponed to finance the plan.

to solve this legitImmal situations have passed to 401pcs, IRA or employee cash accounts to help fund retirement. The retirement money is not based on what the company has, but what the employee has invested (perhaps corresponds to corporate funds). Employee and not the company owns these plans. So the collapse of the company cannot have any effect on money. However, the money invested in such plans is subject to risk or loss if the employee carries out poor investment or interest rates or stock market. Given that there are still pension plans, this problem will continue to be a problem and probably will most likely affect those who have worked all their lives and now face any retirement financial security.