Retirement Checks Are Going Unclaimed
In the search for retirement security, don’t forget to look for pension dollars you may have already earned--and forgotten about.
Experts estimate that as many as 5% of Americans who are due pension benefits are in effect missing in action. These are people who got new jobs, moved or maybe remarried and changed their names, never bothering to notify former employers of their whereabouts.
The bottom line is that millions of dollars of retirement checks are going unclaimed.
“If you lost your wallet at the grocery store, you’d rush back to find it,” said Steve Kandarian, executive director of Pension Benefit Guaranty Corp. in Washington. “Well, here’s a case where workers may have lost a pension worth thousand of dollars.”
There are many reasons that people may have lost track of pensions, said Regina Pizzonia, vice president and associate counsel for T. Rowe Price Associates in Baltimore.
Workers might not realize that they were accruing benefits because they worked for a small employer who didn’t do a good job of communicating plan benefits. Or they may have been so young that they paid no attention to retirement benefits. Or they may have lost track of an employer that was purchased or merged into another company, never stopping to think that the new company would hold the old company’s pension assets.
In any event, it’s likely that hundreds of thousands of individuals have pensions waiting for them.
“It’s not that it’s a gigantic number of people involved, but sometimes it’s a lot of money,” Pizzonia said. “You have to imagine that this is money that the participant could really use.”
Pension Benefit Guaranty Corp. has been operating an online search tool for lost pensioners whose plans were taken over by regulators because the company filed for bankruptcy protection or dissolved its plan.
During that time, more than 12,000 individuals have found pensions worth $1 to $172,000, according to PBGC officials. Just since October, the agency has found 1,934 lost participants, owed an average of $5,791 each. The agency still has $57 million belonging to 15,000 pensioners.
To find a lost pension that’s held by the PBGC, go to the pension search prompt at www.pbgc.gov and type in your name and Social Security number. If there’s a match, the agency will require some paperwork, but usually within four to six weeks, the pension is recovered.
Those who lost track of a former employer may have a tougher time, particularly if that employer has changed names, merged or otherwise muddied its corporate identity. Because this type of search can be time-consuming, those who are unsure whether they have vested benefits with a long-lost employer may want to assess their chances before looking, regulators say.
Today, most plans require five years of employment to become vested in, or fully entitled to, a company pension. However, before the mid-1980s, it typically took 10 years; and before the Employee Retirement Income Security Act was passed in 1975, many companies provided pensions only if you worked for them until you retired.
Translation: The older the work history, the less likely you are to have a vested pension.
In addition, in 1984 a law was passed to protect spousal rights under pension law. Surviving spouses of individuals who earned a pension after that point also could be due benefits.
The place to start searching for a lost pension is in your records. Look for benefits statements, summary plan descriptions or exit letters that you may have received from an old employer.
The Social Security Administration may be able to help. The agency maintains earnings records and employer identification numbers. That identification number could help you find a plan that has been taken over by another company. The Social Security Administration can be reached toll-free at (800) 772-1213.
If workers at your former company were represented by a union, the union may have information about whether there is a company pension and what happened to the firm and its benefits.
Officials at a local Chamber of Commerce--or a helpful librarian--also could help you track corporate histories, finding leads on a company that has moved or merged.
Once you find the company, it’s up to you to contact the benefit representatives to stake your claim.
If you’re certain you’re owed a pension, but you can’t find the company or can’t persuade the benefits representatives to help you, contact a pension-counseling project. There are 10 such projects nationwide. In California, the Pension Rights Project is in San Francisco and can be reached toll-free at (800) 474-1116.
