What are the Primary Types of Pension Plans Subject to ERISA?
The primary pension plan types governed by ERISA are single-employer plans and multiemployer plans.9 Single-employer plans may be either defined benefit plans or defined contribution plans.10 Defined benefit plans are generally of substantially greater concern in bankruptcy proceedings than defined contribution plans. In most cases, defined benefit plans provide for the payment of benefits in an amount determined by a formula that is based upon factors such as the duration of an employee’s service and/or the amount of the employee’s compensation. Except upon termination of the plan, employee benefits are usually distributed under a defined benefit plan without reference to the amount of plan funds available. Defined benefit plans are funded on a group basis based upon actuarial assumptions as to the amount of money that will be needed to pay the promised benefits. The plan sponsor bears the risk that its periodic funding contributions will not be sufficient to pay benefits promised pur
