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Lost Pensions Can be Tough Case to Crack
By Eileen Ambrose, The Baltimore Sun
December 18, 2005
Paul Horowitz has been on a five-year quest, searching for a union pension he was promised decades ago when he worked in NewYork delicatessens.
He had been a member of a union for more than 19 years until the deli he worked for closed around 1980. He found another job, and the union reminded him to get back in touch when he turned 65 to collect a $100 monthly pension.
Over the years, Horowitz lost track of his union and local, which long ago merged with another. He moved to Baltimore about eight years ago, where he now works as a breakfast cook.
"Somewhere down the line they disappeared. I tried to find them. I could never get ahold of them," Horowitz said. "I should have had a pension for five years now."
Many people are in a similar predicament. Workers lose sight of private pensions when they move, or after a former employer closes or is acquired. Paperwork is tossed and memories fade, so workers and retirees may not know what happened to the benefits promised long ago.
You have to be a bit of a Sherlock Holmes to track down a missing pension. And even when your sleuthing locates a retirement plan, the job may not be done if records are lost and you must reconstruct your employment history. Still, undertaking a little detective work can pay off.
The Pension Benefit Guaranty Corp. holds $63 million in unclaimed pension benefits for about 34,000 individuals whose plan was closed and who couldn't be found. The usual number of 401(k) plans abandoned each year is 1,650, with a total of 33,000 participants and $868 million in assets, according to the Department of Labor. And an AARP report last year estimated that more than $100 billion remains unclaimed in traditional pensions and defined contribution plans, which include 401(k)'s.
"This is a serious problem," that often affects many lower-income people, said John Turner, one of the report's authors and a senior policy adviser with AARP. "For them, the money can make a difference in their lives."
How do you search for a missing pension? Government agencies and pension counselors can help. Many resources are available online. For those who don't use the Internet, computer help is often available at a library or senior center.
Be aware that pensions going back before the Employee Retirement Income Security Act of 1974 can be more difficult to trace. Today, for instance, workers typically become entitled to a pension after five years of service, and they can't lose benefits they earned if they leave the job before retirement, pension experts said.
Before ERISA, pension rules were all over the map and not always worker friendly. For instance, workers might have to log 10 or so years of service before being entitled to a pension. And they sometimes could lose those benefits if they switched employers before retirement, said John Hotz, deputy director of the Pension Rights Center in Washington.
So someone with a pre-ERISA pension may not be vested--entitled to a pension benefit--even if they worked years at a company, he said.
Start your investigation by looking at home for any statements and other pension paperwork, which can yield valuable clues to a plan's whereabouts, such as the name and phone number of the administrator. Without such documentation, the trail gets colder, but not hopeless.
Here are other sources:
The Pension Benefit Guaranty Corp. is the place to go if your company went out of business. Bankrupt companies often terminate their plans and the PBGC becomes the trustee.
Even a company in good financial health might decide to close its pension plan. The employer must undertake a search for plan participants and pay their full benefits, either in a lump sum or an annuity. Sometimes former workers can't be found, and their benefit ends up with the PBGC.
To search for a plan online, go to the "workers and retirees" section at www.pbgc.gov. You can search for a plan under the company's name, your name or review a list of participants by state, said spokesman Gary Pastorius. If your search is successful or you need help, contact the agency at 800-400-7242.
If a company is still in business and purchased annuities for workers when it closed the plan, contact the employer to find out the name of the insurer that holds your annuity.
The PBGC deals only with traditional pensions.
A benefits adviser with the Department of Labor's Employee Benefits Security Administration at 866-444-3272 can help with problems involving 401(k)'s as well as traditional pensions that haven't been closed.
Face it, many of us are more like Dr. Watson than Holmes. If you need help with an investigation, you may be eligible for free assistance from one of the pension counseling projects funded by the U.S. Administration on Aging.
"We will do an exhaustive investigation into the client's case," said Jeanne Medeiros, legal coordinator with the New England Pension Assistance Project in Boston.
The group, for instance, successfully concluded a 2½-year case involving a Massachusetts widow whose husband had been told he didn't have enough years of service to qualify for a pension. The advocates' research showed that he hadn't been given full credit for his time. The result: the widow will receive $17,000 in back benefits and a monthly $129 pension, Medeiros said.
The New England project received 400 calls last year, and takes on cases where the individual likely qualifies for a pension, she said. It also wrote the guidebook Finding a Lost Pension, which is available on the PBGC's Web site.
Unfortunately, there are only 10 project offices nationwide, and not all states are served. To qualify for help, you or the employer must be based in one of the serviced areas. Contact information is available at www.pensionrights.org.
If you're doing your own legwork, check out FreeERISA.com, which gives free access to recent 5500 forms that pension and 401(k) plans must file with the government. "It's like a retirement plan's tax return" and can give you the plan administrator's address, Hotz said.
Has your former employer been lost in a series of mergers and acquisitions? Check out the "mergers and acquisition" section of www.corporateaffiliations.com, which posts the names of acquired companies and the buyer, Hotz said.
With the help of a librarian, Horowitz found the names of two unions that might be holding his pension. He is hopeful he may at last receive his $100 monthly pension. "It would help--pay my cable bill and my gas," he said.
Locating a pension is sometimes just the first step in a very long process, Medeiros said. You may not be in an employer's records, and without copies of documents, you will have to prove your work history. Often you can do so by buying a detailed earnings history from the Social Security Administration, she said.
But sometimes that's not enough. The New England project once needed to prove that an employee had worked past his 40th birthday to be eligible for a pension. "All we could prove is that he worked in that particular year," she said. But "this guy saved some suggestion from a suggestion box that was dated after his birthday that year." That was the proof that was needed.
Medeiros advises workers to save documents. "We encourage people to be packrats," she said.
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