A business goes bankrupt

Impact on your defined benefit pension plan

If a business goes bankrupt, you will probably lose your job. In that case, no more contributions will be made to the plan by your employer (and you, if members made contributions) and you will not accumulate any more benefits. In such cases, the pension plan will be terminated.

Impact of plan termination on your benefits

The pension fund is not part of your employer's assets. When the plan is terminated, all of your benefits will be paid to you. Your benefits cannot be used to pay the creditors of the bankrupt employer.

If the assets of the pension fund are insufficient to pay your benefits in full, the plan administrator must try to recover them.