Harry Gross: Pensions: Now or later?

Dear Harry:

I'm 58, and I could start to draw a reduced pension. I would prefer to wait until I'm 65 when I'll get 100 percent. I am under the impression that once you begin to draw from a pension that it is secure even if the company goes out of business. Is this so? If I wait until I'm 65, am I at risk if the plan becomes underfunded?

What Harry says: The Pension Benefits Guarantee Corporation ensures that you will receive basic pension benefits based on legal limits. It includes benefits at normal retirement age, most early retirement benefits, disability benefits and survivor benefits . . . but only if the plan is a defined-benefits plan. It does not insure defined-contribution plans such as 401(k) plans. It applies only to benefits earned before the plan terminates. The benefits you will receive depend on the provisions of your plan, your age, plan assets and any amounts recovered from your employer for underfunding. There are annual maximums set before January of each year. For 2008, it is $51,750. Your plan administrator can give you information that applies in your company's plan. On the surface, it appears that your security position will be the same either way. *

Write Harry Gross c/o the Daily News, Box 7788, Philadelphia, PA 19101.