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No Pension Check in the Mail?

Pension plansThose lucky enough to have earned a defined-benefit pension are in a great position allowing them to retire with a steady income stream for life. However, it's no dream when the promised benefits don't appear.

An investigation by the U.S. Department of Labor says that many retirees aren't getting the benefits they've earned. The plans the government has looked at thus far owe more than $500 million to retirees.  The Labor Department has investigated more than four dozen large pension plans and has found staggering results: some of them are not doing a very good job of monitoring retired participants and paying benefits when they're owed. Some plans don't even have the names or ages of many of their participants.

In addition to poor recordkeeping, corporate mergers, spinoffs, and bankruptcies make it difficult for retirees to track down and claim pensions from employers they left years ago. In light of this unfortunate reality, plan members must maintain employment records, plan documents, tax returns, and other paperwork that show they're eligible for a pension. Plus, they must be proactive in claiming their benefits when the time arrives. These plans don't have much motivation to pay benefits when they're due.

If you've earned a pension, hang on to your individual benefit statements and the summary plan description that outlines the requirements for earning benefits. Also, keep your records of employment—including W-2 forms and pay stubs—as well as all of your old tax returns. When you claim your benefits, the plan might say that it's already paid you a distribution, so you'll need your old tax returns to show if that's accurate.

In the event you leave a job before the plan's retirement age, make certain that you have a vested benefit and get the plan's most recent summary plan description. This will tell you the benefits you get in retirement. Update the plan for any changes in your contact info and marital status. If your plan is terminating, make sure you know who's going to be administering the plan. If the plan is sufficiently funded, an insurance company will take over payment of the benefits. If not, the plan will likely be turned over to the Pension Benefit Guaranty Corp.

If you lose track of a pension, go to https://www.pensionhelp.org to find pension counseling projects funded by the U.S. Administration on Aging. Look at your old W-2 to find your former company's employer identification number (EIN)—that can help you find the company. Look for a "notice of potential private pension benefits." This is a reminder from the Social Security Administration to those who've earned a private pension. Plans turned over to the PBGC may be found at www.pbgc.gov/wr or click "find an unclaimed pension" at the site to find out if your name is on the PBGC's list of missing participants. If you've been omitted from your plan's records, you have to document your work history and eligibility for the benefit. If you lack W-2s and other employment documentation, you can get a Social Security earnings statement using Form SSA-7050 for $136.

We understand the needs of our clients; they trust us to provide them with good advice with the issues they will likely face at their stage of life. Call to schedule your complimentary consultation or request a consultation online.  Don't forget to register for one of our complimentary seminars on topics of interest to families like yours.

Reference: Kiplinger's (June 2016) "Missing Pensions Costly to Retirees"

 

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The unprecedented coronavirus pandemic has taken our entire country by surprise. We understand how difficult this time is for America’s businesses and families.  However, we believe it is vitally important that we make every effort possible to continue to offer solutions that avoid disrupting our important partnership with you, your family and friends.  As you know, estate planning is not something that should wait for a more convenient time, therefore the opportunity to address your important goals both during and after this crisis should not wait.  To that end, we have added the option of a ‘virtual consultation’ to our office process.  You will now have a choice of either meeting with us in our office or in the comfort of your own home.