How to find a lost pension
CHICAGO (Reuters) - When Frank Marroquin retired last year, he expected to live on his monthly $1,660 Social Security check, but then he remembered he was eligible for a pension from a former employer.
The 66-year-old Marroquin worked at MCC Powers from 1969 to 1982 and lost track of the company after it went through several mergers and ownership changes.
"I completely forgot about it," he says of the pension. "You never think you will get to retirement age."
Marroquin's experience isn't unusual, especially in today's economy, where workers change jobs often - and companies frequently are bought, merged, moved or simply shut down. For former employees, staying in touch becomes more difficult as the changes multiply over time.
The odds of record-keeping errors also grow as companies change hands - and pension plan sponsors have trouble keeping track of former workers who might have moved, changed their names or died.
Unclaimed pension benefits simply stay in the pension plan, or with the Pension Benefit Guarantee Corp (PBGC) in the case of terminated plans. That's different from an unclaimed 401(k) or IRA account, which is the personal property of account holders or their beneficiaries.
Finding unclaimed pension benefits could make a huge difference to millions of Americans. About 23 million people over the age of 60 received pension benefits in 2010, according to the National Institute on Retirement Security (NIRS).
No one tracks how many people have failed to claim pension benefits they have earned - or benefits that have been passed on to a spouse as a survivor benefit. But PBGC, a government-sponsored agency that takes over terminated private-sector plans, says more than 38,550 people are owed more than $300 million - $9,100 on average - from plans it administers.
Many people are looking for their pension benefits. The Pension Rights Center, which works nationally to assist workers on pension issues, reports that 28 percent of the pension problems it handles are lost pension plan matters.
"Of the types of cases we handle, this is far and away the biggest category," says Rebecca Davis, the PRC's legal director. And the New England Pension Assistance Project (NEPAP) reports that it has recovered $41 million for nearly 6,000 clients since 1994.
Marroquin is luckier than many people. He had an old letter about the pension, but wasn't sure how to collect it. After numerous calls, the Pension Rights Center referred him to NEPAP, because one of the possible successor companies was in New England.
NEPAP was able to trace Marroquin's pension to Siemens. He received a $2,300 payment retroactive to his pension's start date in late 2010, and now receives $153 a month.
"It might not seem like a lot of money, but it helps me pay the bills," he says.
KEEP TRACK, KEEP DOCUMENTS
Of course, the best strategy is to not lose track of potential pension benefits.
If you do have a pension at a company that is sold or goes out of business, contact its human resources department immediately to find out about the pension plan, says Jeanne Medeiros, NEPAP's managing attorney.
"Ask if the plan is being terminated and being trusteed to the PBGC?" she says. "Is it going to a successor company?"
Keeping good records of your employment and earning history is critical, too. NEPAP advises pension plan participants to keep all their old income tax returns and W-2 forms, because these documents can help establish these histories in case a successor plan administrator's records are incomplete or in error.
"Many experts say it's OK to get rid of your tax returns after six or seven years, but that's bad advice for anyone with a pension," Medeiros says.
If you haven't saved tax returns and need to document an employment history, order a detailed earning report from the Social Security Administration, using SSA Form 7050 (www.ssa.gov/online/ssa-7050.pdf). You'll pay a small fee for the report, with the amount varying according to the number of years of earnings data requested.
The Pension Rights Center advises workers to hold on to copies of annual Summary Plan Descriptions (SPD) they may have received from employers, or any individual benefit statements.
And if you leave a company before retirement, ask for written verification of your vested status with the plan administrator before you leave. Make sure pension managers know where to contact you, and keep them up to date if your contact information changes.
Also, be sure to get a copy of the SPD in effect on your last day of work, because your benefits will be determined by the plan in effect on your last day. You can obtain the SPD by making a request in writing to your plan administrator.
The PRC maintains a resource section containing detailed tips on tracking your pension (here).
Very few attorneys or financial planners handle lost pension cases, but there are nonprofits that may be of assistance. NEPAP helps workers in New England at no expense, and recently expanded its services to Illinois. It is one of seven pension assistance programs around the country, which serve workers in 30 states; a directory is available at the website of the Pension Rights Center (here).
Not sure if you're entitled to a pension? The PBGC maintains a database that can be searched for unclaimed benefits (search.pbgc.gov/mp/mp.aspx). But it only covers plans that have been turned over to the agency. You may be able to get additional help searching for possible benefits through one of the pension assistance programs.
(The writer is a Reuters columnist. The opinions expressed are his own.)