If you have a pension and your employer goes bankrupt then does that mean that your pension will disappear? In a word : no. The Pension Benefit Guarantee Corporation (PBGC) guarantees pension plans so that if an employer fails then the PBGC will take over the pension and pay the benefits.
When I say pension I mean a pension with a defined benefit. This is the old style of pension that would for example pay you 2% of your pay for every year your worked, so if you worked at a company for 35 years you'd retire at 70% pay level.
What does the PBGC cover?
There are limits to what the PBGC covers. They only cover defined pensions up to a maximum amount. Currently in 2009 the maximum is $4,500 a month for a single beneficiary or $4,050 for a 50% joint survivor pension. The PBGC does not cover things like medical benefits or death benefits.
What about my 401k?
401k's and IRA's are not pensions. 401k's or IRAs are not a defined pension plan and are not guaranteed by the PBGC. What you have in a 401k or IRA is based on how much money you put in and how your investments have grown. 401k's and IRAs are safe from an employer bankrupt by their nature as that money is already in a dedicated account and can not be touched by the company. So the employer can't raid or spend your 401k. There is no guarantee that your 401k investments won't go down in value. However if the company managing your 401k goes bankrupt then your funds are insured against their failure.
So bottom line : If you hav an 'old style' defined benefit pension then there is no need to worry about your pension if your employer goes bankrupt. The PBGC will insure your pension.