Q&A; : Parents Are Entitled to Social Security Survivors’ Benefits if Certain Terms Are Met

Q. I support my parents. If I should die first, would they be entitled to receive survivors’ benefits based on my Social Security earnings? They receive very small Social Security benefits right now based on their own meager earnings.

--I.L.Q.

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A. The Social Security Administration does allow parents to receive Social Security benefits on the accounts of their children if certain and very specific requirements are met.

Here they are:

* The applicant(s) must be the natural parent(s) of the wage earner or have become the adoptive or stepparent(s) of the wage earner before the wage earner turned 16.

* The wage earner must be dead.

* The wage earner must have provided at least half of the support of the parent(s) making the application, and the applicant(s) must be able to prove that fact.

* The applicant(s) must be at least 62.

If these conditions are met, the Social Security Administration will pay 82.5% of the wage earner’s projected benefits at age 65 (based on his or her earnings until death) to a single parental applicant. If both parents are applying, each can receive 75% of the projected benefits. Of course, this payment assumes that the parents’ own benefits are less than what they would receive on their child’s account.

For more information, ask your local Social Security representation about parents’ benefits.

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Q. I left my previous employer in April 1994 and have still not received the distribution from my 401(k) account. The plan says distributions must be requested in writing and I did that; the response said I would receive my money in 1997. This seems an excessive wait. I should add that I am worried about the financial solvency of this company. If they go out of business, could I lose my benefits?

--M.G.

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A. You are right to be concerned about the excessive wait for your money. While there are no legal deadlines for disbursing these funds to an employee who has left a company, federal pension rights officials say three years is entirely beyond the scope of what is considered normal and appropriate.

What should you do? First check with your company’s plan to learn what it says about account disbursements. If the company has not lived up to those requirements, you should contact David Ganz, regional director of the Labor Department’s Pension and Welfare Benefits Administration, 790 E. Colorado Blvd., Suite 514, Pasadena, CA 91101. (This office investigates only potential abuses and is not equipped to handle benefit disputes or other pension issues.)

According to Ganz, if your company has been administering its 401(k) plan properly, its funds should be held in trust for its employees in an account entirely separate from the company’s normal business operations. Furthermore, companies are prohibited by law from using 401(k) and other pension trust account funds to tide them through tough times. That said, it is still entirely possible that your former employer could have looted the 401(k) fund to cover its business obligations. Waste no time in getting in touch with Ganz with the particulars of your case.

Carla Lazzareschi cannot answer mail individually but will respond in this column to financial questions of general interest. Please do not telephone. Write to Money Talk, Business Section, Los Angeles Times, Times Mirror Square, Los Angeles, CA 90053 Or send e-mail to carla.lazzareschi@latimes.com