Lost Pensions: How To Track Down Missing Funds

It’s not uncommon for people to lose track of their pension plans from an old job. Companies can go out of business, change names, or move to a different city. In such a case, your pension is not necessarily lost. However, finding it might take a little research. Here’s how you can track down the missing funds.

Contact your one-time employer

When trying to locate your retirement benefits, reaching out to your previous company of employment or its successor should be your first step. Try to contact your pension plan’s administrator or the administrator of another retirement plan that may have been combined with yours. A new company could have inherited your former employer's legal obligation to pay the benefits of your pension plan. To get more information about who is currently in charge of your retirement plan, you can reach out to the union associated with your former company, contact former co-workers, or search for news about corporate mergers and bankruptcies. Pension plan annual financial reports can be quite helpful when it comes to identifying who to contact, which in most cases will be the plan's trustee, accountant, or attorney. These annual reports are part of the federal form 5500.

Consider financial and insurance service providers

Your pension plan assets could have been turned over to an insurance company, meaning the insurer is obligated to pay out the annuity benefits to every eligible participant. Financial institutions will at times administer pension plans and hold money for every participant they were unable to locate and pay.

Search the Pension Benefit Guaranty Corporation (PBGC)

The PBGC insures pension plans associated with the private sector and will pay benefits to a certain limit if the plan fails. The PBGC’s database of unclaimed pensions contains the details of about 38,000 pensioners who are eligible for payments, all of who their former employers or the PBGC failed to locate.

For instance, 2,309 of United Airlines’ former employees are eligible for pension payments that they have not yet claimed. The same goes for 1,485 former employees of W.T. Grant, a mass-merchandise chain. Nortel Networks (1157), US Airways (522), and Circuit City Stores (687) are some of the other companies with a significant number of unclaimed pensions. According to the Pension Benefit Guaranty Corporation, New York has the highest number (6,401) of unclaimed pensions in the United States, followed by Illinois with 4,379, California with 2,856, and Texas with 2,189. The PBGC adds that these unclaimed pensions are worth more than $200 million collectively, with individual benefits ranging from a few dollars to as much as million dollars.

Apart from 401(k) plans, the Pension Benefit Guaranty Corporation does not usually insure pensions provided by federal, state and local governments, religious groups, and groups of doctors, lawyers, or professionals with less than 26 employees.

Collect the paperwork

An exit letter or individual benefit statement detailing your participation in the pension plan could help prove that you are eligible for payments. Additionally, W-2 forms and pay slips showing your earnings and employment dates could signify eligibility. If you are one of those who could be due pensions, the Social Security Administration will send you notice of your potential private pension benefits when you sign up for Medicare and Social Security.

Look into spousal payments

For married employees, defined benefit pension plans will sometimes offer a qualified joint and survivor annuity, entitling the surviving spouse to pension payments. You should, therefore, look into the payments that you may qualify for if you’re married to an employee with a pension, even if the person has since passed on.

Make sure you are vested

To be eligible for pension plan benefits, you must be vested in a plan. When vested in a retirement plan, you automatically qualify for these benefits at retirement age. In such a case, when you left the job does not matter. Typically, a summary plan description will contain a detailed explanation of the plan's rules for vesting. Although some pension plans will vest in 10-20 or more years, others will require as little as five years of service in order to qualify for pension payments in retirement. If an individual is not vested in the pension plan, then he/she is usually not eligible for payments.

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