Changes to Retirement Plans

Company and union retirement plans are voluntary. This means that employers are not required to provide a plan. However, once they set up a pension plan or a 401(k), 403(b) or other retirement savings plan, they are required to follow certain rules required by the federal private pension law, the Employee Retirement Security Act, called ERISA. For instance, they have to allow you to earn the right to a retirement benefit after working a certain number of years, provide you with important information about your benefits, and offer a process for you to challenge the denial or miscalculation of your benefits, among other important rights. The rules for government and “church” plans are different and are not discussed here.

With some exceptions, the law generally prohibits retirement plan changes that affect the benefits you’ve already earned. However, changes in plans are permitted going forward. For example, employers and plan trustees may decide to change their retirement plans by reducing the level of benefits that you can earn in the future, or they may freeze the plan for new employees, not allowing them to earn benefits under the plan. Or they may stop a plan or merge two retirement plans. When employers go through a “restructuring” (for example, they buy or sell a division) it is possible that a totally new company could take over a retirement plan and a portion of the benefits you had counted on receiving will not be paid.

Learn more about this issue

Click on the headings below to see more information.

Employers may decide to “derisk” a pension plan.
Companies are allowed to stop their retirement plans at any time.
Companies can freeze their pension plans.
Companies can stop making matching 401(k) contributions.
Companies can change plan rules for the future.
Certain financially troubled plans can change their rules to reduce promised benefits.

Changes to Retirement Plans Highlights:

Fact Sheets and Issue Papers
09/17/15 |Pension Rights Center

Companies that have transferred pensions to insurance companies

Fact Sheets and Issue Papers
09/17/15 |Pension Rights Center

Companies That Have Changed Their Defined Benefit Pension Plans

The Latest on Changes to Retirement Plans:

PRC In the News

The truckers’ triumph: The incredible story of how a scrappy group of blue-collar retirees rescued their pensions

‘I had to get this fight done no matter what’: It took retired trucker Mike Walden nine years, but reinstated benefits recently started flowing to multiemployer pension participants across America.

PRC In the News
11/10/20|Comstock's Magazine

Transfer of Power

In March, Truckee-based Mountain Hardware and Sports was up against the toughest test of its 43-year record of no layoffs. As the economy was going into a deep freeze, company president Doug Wright sent a letter to his staff on March 17.

PRC In the News

How to Choose Between a Pension and Lump Sum Payout

In the midst of a COVID-19-induced sales slump, Honda recently offered early retirement to some of its U.S. workers 55 and older.

PRC In the News

Retirement Savers Could Be Put At Risk By Proposed Rollover Rule, DOL Warned

Retirement savers could be put at risk by a proposed Department of Labor rule on workplace retirement plan rollovers and lump sum distributions, DOL was warned today.

Blogs & Newsletters

Treasury Notice puts retirees’ pensions at risk

By Karen Friedman Sometimes important changes in pension law are made through the regulatory process or even, more subtly, through guidance that agencies issue to address key issues. Often the guidance sounds technical, but it can make a world of difference, either positively or negatively, to the economic security of retirees. One negative change was […]

Blogs & Newsletters

Dialed-up employee outcry causes AOL to dial back 401(k) changes

If you’re an AOL employee who went away for a long weekend you might have missed the hubbub about your 401(k) plan. Here’s a recap: On Thursday AOL announced that it would make its 401(k) matching contribution to workers’ 401(k) plans in one lump sum at the end of the calendar year. The outcry was […]

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