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Bankruptcy and employees' retirement
Bankruptcy and employees' retirement
What would happen to the employees' pensions and 401(k)s if the auto companies were to file bankruptcy? --Dave

The pension funds of the Big Three are in relatively good shape, so it's not likely that the government will be stuck with a large unfunded obligation.

But some workers, who retired from the automakers in their 50s, could see their benefits cuts if the pensions are taken over by a federal agency. The government doesn't promise to pay the same level of benefits for those who retire before 60.

It's not certain they'd see a benefit cut - it will depend upon the value of the pension fund assets and obligations when the government takes over the pension funds. But a benefit cut is possible.

NEXT: Joining forces

Last updated December 26 2008: 8:55 AM ET
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