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Ask the Experts

Will My Pension Go Bust With My Employer?

Agency will pay benefits to a soon-to-rise maximum

En español | Q. My company's been struggling and now there's talk that it's heading toward bankruptcy. What does that mean for my pension?

A. The Pension Benefit Guaranty Corp., a federal agency, would pay your benefits if your company terminated the pension plan or if the plan were underfunded.

See also: How companies profit from employee pensions.

Bankrupt office - Pension board raises maximum payout to $56,000 a year.

You'll still receive a pension if your company goes bankrupt. — Photo by Peter Marlow/Magnum Photos

You might not get the total amount of your promised benefit, because of maximum limits set by law. But now, for the first time since 2009, those limits are about to be raised.

Beginning Jan. 1, a 65-year-old retiree can receive a maximum of almost $56,000 annually, an increase from $54,000.

The amount retirees collect is based on a formula in which people older than 65 get a higher amount and those who retire earlier or choose survivor benefits collect lower amounts.

Also of interest: Pension in peril. >>

Carole Fleck is a senior editor at the AARP Bulletin.

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