Which of the following statements is true regarding Pension Wear-Away?

The statement regarding Pension Wear-Away that is true is that it is prohibited under the Pension Protection Act since June 29, 2005. This act was established to improve the funding of pensions and protect employees' benefits. Pension wear-away occurs when a participant’s expected benefits under a new pension plan do not exceed their accrued benefits from a prior plan, effectively freezing the growth of benefits for a period.

By prohibiting pension wear-away, the Pension Protection Act ensures that individuals transitioning between pension plans will not see their benefits stagnate or be diminished. This is particularly significant for participants who may be near retirement or who have had a long tenure with their organization, ensuring their accumulated benefits can be maintained or increased rather than diminished during plan changes.

The other options lack accuracy in context. Younger participants are typically less affected by wear-away than older participants, which counters the claim of benefiting younger participants more. The act does not allow for increased contributions just based on plan changes, which makes that answer not applicable. Finally, while participants should have guaranteed benefits, the caveat here is how those benefits might be affected by a change in plans, particularly in referencing wear-away scenarios, rather than implying guaranteed benefits regardless of any changes. Thus, the prohibition under the Pension