A business goes bankrupt
Impact on your simplified pension plan (SIPP)
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 (no new amounts will be credited to your accounts). In such cases, the pension plan will be terminated.
Impact on your benefits
The pension fund is not part of your employer's assets. When the plan is terminated, all of your benefits (the amounts credited to your accounts) will be refunded to you. Your benefits cannot be used to pay the creditors of the bankrupt employer.
Important
If the employer was responsible for certain costs related to the plan, it is possible, indeed probable, that because of the employer's bankruptcy, costs related to the plan's termination may be deducted from the amounts credited to the member accounts.
If the employer has not paid certain sums into the pension fund, the financial institution that administers the plan must take the necessary steps to recover them.
It may turn out that such amounts owing to the pension fund cannot be recovered and refunded to the plan members
Do you have any questions?
Contact your employer or the financial institution that administers your simplified pension plan.