You may need to track down the pension you earned.
Pensions are becoming less common ... and, unfortunately, payment of pension benefits.
According to a recent Kiplinger article titled "Missing Pensions Costly to Retirees," the U.S. Department of Labor recently investigated more than four dozen large pension plans and found that together they owe more than $500 million to the retirees.
How could this happen?
- Poor record keeping,
- Corporate mergers,
- Spinoffs, and
How can you secure your pension when the records for many plans are missing the names, ages and addresses of their participants?
You will have to track down the funds yourself.
Pension plans record keeping is unreliable.
If you want something done right, then you have to do it yourself.
Secure relevant paperwork in a safe location.
What does this include?
First, keep any documents directly related to your pension. For example, keep any individual benefit statement or the summary description of benefit requirements.
Second, retain your employment records. Think pay stubs, W-2 forms and tax returns. These records can clear up any disputes regarding whether the benefit has been paid.
Be “in the know” before you go.
If you retire early, make sure everything is in order and get the latest summary plan description.
This outlines your retirement benefits.
Be sure to update your personal and contact information.
Also, if your plan is terminating, do not leave without being told who will be taking over the payment of the benefits.
If the funds are there, an insurance company may serve as the administrator.
If the plan is not sufficiently funded, the Pension Benefit Guaranty Corp. will likely take control.
Track down your lost pension.
Worst case scenario, you cannot find your pension.
Fear not. There are resources available to you.
First, check https://www.pensionhelp.org. Here you can locate pension counseling projects supported by the U.S. Administration on Aging.
Second, scan your old W-2 for the employer identification number (EIN) of your former company. This is similar to the social security number of the business and is useful for locating the company.
Third, check your mail for a reminder "notice of potential private pension benefits" from the Social Security Administration.
Fourth, go to www.pbgc.gov/wr. This is the official website of the previously mentioned Pension Benefit Guaranty Corp.
Specifically, click "find an unclaimed pension" to see if your name is on the site.
If your name is not on the site, the aforementioned record keeping will become useful.
If you have no records, you may pay $136 using Form SSA-7050 to get a Social Security earnings statement as documentation as proof of your pension.
It may seem like a lot of work, but getting the pension you earned is worth every step.
It just takes a little organization, investigation and determination.
Remember: “An ounce of prevention is worth a pound of cure.”
When making your financial, tax and estate plans, do not go it alone. Be sure to engage competent professional counsel.
For more information about estate planning in Overland Park, KS (and throughout the rest of Kansas and Missouri), visit our estate planning website and be sure to subscribe to our complimentary estate planning e-newsletter while you are there.
Reference: Kiplinger's (June 2016) "Missing Pensions Costly to Retirees"