Is Your Pension Still Safe?

Probably. But new rules could make it harder for you to get all of your money.

John Sidorenko has hit a few speed bumps along his route to retirement. In December 2007, Delphi Corp., the financially troubled auto-parts manufacturer, shuttered the Columbus, Ohio, plant where Sidorenko had worked as an engineer for nearly 31 years. That was two years before he had planned to retire. But thanks to a comfortable nest egg -- his pension plus his 401(k) plan -- and the fact that his wife, Betsy, continues to work as a school administrator, Sidorenko, 55, could afford to take an early retirement while many of his colleagues searched for new jobs.

Then last September, Delphi froze its pension plan -- meaning current employees will keep whatever benefits they have earned so far but will not accrue future benefits. Fortunately, Sidorenko's monthly pension checks haven't been affected, at least not yet. "We're assuming his full benefit is safe -- for now," says David Kudla, head of Mainstay Capital Management, in Grand Blanc, Mich., and Sidorenko's longtime financial adviser. But if there is a future reduction in Sidorenko's pension benefit, he might have to draw more money out of personal savings.

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Mary Beth Franklin
Former Senior Editor, Kiplinger's Personal Finance