ABA Family Legal Guide

The Rights of Older Americans

Pensions

Traditional Pension Plans

What protection does Employee Retirement Income Security Act (ERISA) offer when my company is sold or taken over?

This area of law is not entirely clear. In some cases, successor liability is found and the company must continue the plan. If such liability is not found, your new employer is under no obligation to continue an existing pension plan. The new employer can go without a plan, set up a new plan, or continue the existing plan. If the new employer decides to continue the plan, however, ERISA requires that previous years of service be counted.

And you still have a right to all the benefits earned under the old employer. If the new employer abandons the plan, though, you will not continue to earn benefits.