Are Pension Funds protected by FIDC?

Question

My organizations employee pension plan is with a bank and we were told that each individual employees account is an individual account and is protected by FIDC up to $250,000. is this true?

Answer 1

Yes, FDIC insurance is now $250,000 on retirement accounts.

http://www.bankrate.com/brm/news/bank/20...

But this insurance doesn't cover some types of assets such as:

• Stocks, bonds and mutual funds

• Investments backed by the U.S. government, such as Treasury securities and savings bonds

• Contents of safe-deposit boxes

• Losses due to fraud or theft at the institution. These situations are often covered by special insurance polices that banking institutions buy from private insurance companies.

• Insurance and annuity products

http://www.bankrate.com/brm/news/bank/20...

Answer 2

Most good pension funds are protected by a "ring fence" type of insurance by a separate corporation.  If your funds is being kept in a separate account in a bank it's only safe up to a certain amount.

Answer 3

Actually the FDIC only protects depositors with makes up to said limitations.

The bank may be the administrator of the plan and may even be the investment advisor for the plan (both a bad idea in my view), but the bank (nor FDIC) does not guarantee the assets of a pension plan.

Most pensions are protected by the "Pension Benefit Guaranty Corporation."

"PBGC is a federal corporation created by the Employee Retirement Income Security Act of 1974. It currently protects the pensions of nearly 44 million American workers and retirees in 30,330 private single-employer and multiemployer defined benefit pension plans. PBGC receives no funds from general tax revenues. Operations are financed by insurance premiums set by Congress and paid by sponsors of defined benefit plans, investment income, assets from pension plans trusteed by PBGC, and recoveries from the companies formerly responsible for the plans."

http://www.pbgc.gov/

I would contact PBGC to see if you plan is under their protection.

Answer 4

FDIC protects deposits in banks.   So if your pension funds are in a bank FDIC would cover it.  But only up to $100,000 per bank.  In order to have more than that the plan would have to have more than one account for you.  

That does not guarantee that your pension fund is fully funded.   Check out the following link.  

http://www.whitehouse.gov/news/releases/...

Also check the links Net Advisor gave.