Pension Action Center

Read about clients helped by the center's services and current issues in the pension field

“Lights, Camera, Action!”

The Pension Action Center recently expanded its investor education initiative beyond its fact sheets by producing an educational video to help workers prepare for a secure retirement. In the video, Jeanne Medeiros, JD, Director of the PAC, and Emily Brown, JD< Staff Attorney, interview PAC Advisory Board Member, Glenn Frank, a financial planning expert, who covers basic investment concepts such as return on investments, asset class selection, and asset class capture. The goal of the video is to educate workers and retirees who are faced with the responsibility of having to manage their own retirement portfolios.

Glenn Frank is a personal financial planner at Lexington Wealth Management and Professor at Bentley University’s Graduate Financial Planning Program. Glenn has been both a practitioner and an educator for over 25 years. He was listed by Worth Magazine for 10 years in a row as 1 of the top financial advisors in the US – Professor Frank has been quoted many times in The Wall St. Journal, Readers Digest, Investment News, The Boston Globe, and other media sources.

The PAC Investor Education Initiative is made possible thanks to a grant from the Investor Protection Trust, a nonprofit organization devoted to investor education, and support from the Secretary of the Commonwealth of Massachusetts.

The video can be found on the PAC website. https://www.umb.edu/pensionaction

If you would like to request assistance from the Illinois Pension Assistance Project or the New England Pension Assistance Project, please contact us directly by calling 888-425-6067.

June 11, 2015
by pension
0 comments

$13,500 in Retroactive Pension Benefits Recovered for Illinois Man

“Staff Attorney Emily Brown’s work on my behalf was the indispensable factor in reversing a prior denial of my pension appeal. Professional and courteous throughout, the Illinois Pension Assistance Project is providing an outstandingly good and needed service in defending individual pension rights. Thank you.”

A 69-year old man from Richton Park, Illinois, contacted the Pension Action Center when he was denied three years of retroactive pension payments.

He had worked for Blue Cross-Blue Shield from 1973 to 1995, was fully vested in his pension, and entitled to $435.18 monthly—commencing at age 65.   Although he turned 65 in January of 2011, he did not elect to start his pension payments until April, 2014, when he had turned 68.  Once the client began receiving these benefits, the plan informed him that, because he had only applied in 2014, the benefits would only be payable from the start date forward. In other words, they were not willing to pay him retroactively for the three years of benefits he should have been receiving between age 65 and 68.

By the time he contacted us, the client had already filed a claim with the pension plan pro se, arguing that he was entitled to three years of retroactive benefits. The plan had denied his claim and he had already filed a pro se appeal. After reviewing his case, Staff Attorney Emily Brown quickly filed a supplemental appeal on his behalf, laying out all the legal arguments which had been missing from the client’s original appeal.

Attorney Brown successfully argued that the Employee Retirement Income Security Act (ERISA) prohibited the forfeiture of the client’s retroactive benefits, since this federal law states that vested pension benefits are “non-forfeitable.” As a result, the client received a lump sum payment of $13,500, money he had earned but may not have recovered without the help of the Illinois Pension Assistance Project at the Pension Action Center.

If you would like to request assistance from the Illinois Pension Assistance Project or the New England Pension Assistance Project, please contact us directly by calling 888-425-6067.

June 10, 2014
by Pension Action Center
0 comments

Union Pension Fund Demands That Retiree Pay $2,000 (Plus Nearly $8,000 Interest!) For a Supposed Overpayment

In a previous article, “Unfair Pension Takebacks,” we discussed what happens when pension plans mistakenly pay retirees the wrong benefit amounts for months or years before discovering their mistake. Many clients contact us when, out of the blue, they receive a letter from the pension fund telling them that their monthly benefits will be cut so that the plan can recover the overpaid amount, and sometimes also demanding that the retiree pay back a large lump sum as well. Many retirees from Illinois received letters like this from their union pension fund, Sheet Metal Workers Local 73, this past summer, and contacted the Illinois Pension Assistance Project for help. We worked on many of these cases throughout the summer and fall of 2013.

Just a few months ago, a 75-year old retired mechanic who was in Local 73 called us because he had recently received a similar letter. His letter stated that, approximately 20 years ago, he had received four checks of about $540 each that he should not have received. The pension fund now wanted him to pay back this $2,000 and also wanted him to pay an additional $7,800 in interest for the 20 years since he had allegedly received this money. The letter further explained that the pension fund would therefore be lowering his pension by over $125 each month to recover this amount – which totaled $10,000 when the interest was added to the “overpayment.”

Fortunately for us and for the client, he had kept meticulous records over the years. Because of this, we were able to show that the pension fund had made yet another mistake: He had never actually received any pension funds from the plan in 1993 and 1994!! The fund had sent him checks that he was able to prove he had returned uncashed. We filed an appeal on our client’s behalf and proved that he had never been overpaid. Once the fund reviewed our appeal and evidence, it agreed that our client did not owe any money, restored his monthly pension to the correct amount, and sent him a check refunding the amount it had already withheld.

This client was lucky that the documents he had kept over the years allowed us to dispute the fund’s obvious error. And he was lucky that the Illinois Pension Assistance Project was able to file an effective appeal on his behalf free of charge.

If you would like to request assistance from the Illinois Pension Assistance Project or the New England Pension Assistance Project, please contact us directly by calling 888-425-6067.

December 3, 2013
by Pension Action Center
0 comments

Unfair Pension Takebacks

One day, out of the blue, you receive a letter from the pension fund telling you that you’ve been receiving the wrong amount all these years.  The plan tells you that you have been overpaid by thousands of dollars through no fault of your own, but due to errors the plan made when it calculated your pension amount.  The letter goes on to tell you that your pension is being lowered not once, but twice – first, to the correctly-calculated amount, and then by some additional percentage -25% or even more, so that the plan can recover the amounts it overpaid.  In addition to that, the letter asks you to pay a large lump sum within a month,  because, according to the plan’s actuaries, the plan does not expect to recover all the money it overpaid  you before you die! 

This nightmare scenario is, unfortunately, becoming more and more common, and has prompted numerous calls to us in the past few months.  One large pension fund in Illinois, for example, recently sent out letters like this to over 500 retirees, asking for repayments in the tens of thousands from individual retirees who the plan claims were paid the wrong benefits for decades.  The Illinois Pension Assistance Project is currently helping a number of these people.  We are asserting that the plan’s recovery efforts are inequitable due to the fact that none of these retirees were at fault , that the overpayments were completely the result of the plan’s errors and failure to corrects its own errors for so many years, and that the plan’s recovery efforts would create severe financial hardship for these retirees. 

Plans justify these recoupment actions by claiming that the plan has a fiduciary duty to collect overpayments on behalf of all other participants in the plan.  Unfortunately, given the state of the law right now, many pension plans feel they can write their own rules when it comes to overpayments.  Some plans just lower the benefit amounts with little or no warning to retirees and with no formal process for challenging the plan’s actions.  Although a Department of Labor Advisory Opinion  specifically authorizes a plan administrator to consider financial hardship to the retiree in these situations, this guidance does not seem to be widely known, and does not set any specific, objective limitations on a plan’s ability to recoup. The only standard it sets is highly subjective , and does not define the type or level of hardship a retiree should show to get relief.  There is a body of case law that supports our position that a plan must look at all of the equitable factors before undertaking any recoupment, but this is also subject to interpretation.

In the lack of more clear and definite guidance in this area, plans take widely varying approaches.  We have succeeded in getting some plans to waive some or all of the overpaid amounts, but we have also had plans fail to even acknowledge that these issues are subject to formal claims and appeals procedures.  Plans and participants would all benefit from having more definitive guidance in this area.  Some of the proposals over the years have included time limitations on a plan’s ability to recover overpaid amounts, a requirement that financial hardship to the retiree be considered, along with some definition of financial hardship, a limitation on the monthly amount which can be recouped, and clarification of the procedures by which a retiree can challenge a plan’s recoupment action.

Overpaid benefits present a difficult situation for both plans and participants.  Plans need to balance their duties to an individual participant with their duty to all participants, while retirees should not be subjected to unexpected and excessive financial burdens created by a plan’s mistake.  While we will continue to strive to help our individual clients with these cases, we see the need for more definitive guidance setting  appropriate limits on a plan’s ability to recoup these overpaid amounts.

For more information on services provided by the Pension Action Center, visit http://www.umb.edu/pensionaction or call 888.425.6067.

November 26, 2013
by Pension Action Center
0 comments

Illinois Pension Assistance Project Helps to Find Lost Pensions for Clients

The Illinois Pension Assistance Project (IPAP) has recovered nearly half a million dollars in pension benefits for clients since its inception in July of 2012. One of the project’s areas of expertise is finding lost pensions. Workers and retirees can lose track of their pension benefits since, over time, companies may have gone bankrupt or changed ownership through mergers and acquisitions. Therefore, it is not uncommon for these companies’ retirement benefits to become lost.

For example, a 52-year old Illinois resident recently contacted IPAP asking for help locating his pension. The company he worked for from 1984 – 1999 had gone out of business and he did not know who to contact regarding his retirement benefits. The only documentation that the client had was a statement that he had received in 1995 stating that his pension plan had been frozen, as of December 31, 1994, and that he was entitled to a monthly pension at age 65.

The case was assigned to Teresa Ryan, one of the pension counselors on staff. She began to research his former employer, Sullivan Graphics. She found out that the company had changed its name to American Color Graphics in 1997 and, as of 2008, had been a subsidiary of Vertis Holdings. Vertis filed for bankruptcy in 2012. Due to the bankruptcy, The Pension Benefit Guaranty Corporation had trusteed the plan. Teresa was able to obtain the summary plan description and other information about the client’s benefits.

Teresa informed the client how he could obtain his benefit. It is estimated that he will be eligible for a retirement benefit of $512.98 per month at age 65. It would have been very difficult for the client to navigate his way through the investigative process that led to this positive outcome. Our client can now look forward to a more financially secure retirement.

If you would like to request assistance from the Illinois Pension Assistance Project or the New England Pension Assistance Project, please contact us directly by calling 888-425-6067.

August 26, 2013
by Pension Action Center
0 comments

Corporate Mergers Make Claiming Pension Difficult for Massachusetts Woman

The New England Pension Assistance Project recently assisted  a 60-year-old woman from Waltham, Massachusetts, who was having difficulty claiming her pension benefits due to a series of corporate mergers and acquisitions. She had worked for the GTE Corporation at two separate periods of time. During those years, there were a number of corporate changes. She was aware that the company had merged with Bell Atlantic.

Her Detailed Earnings Report showed her employer as “Genuity” for a certain period and the entity responsible for the pension was now, she thought, Verizon. She also had a break in service of 11 years between the two periods when she was in these jobs, but believed that there had been some agreement that all of this service would be “bridged”.

After a lengthy investigation and communications with Verizon and Genuity, Verizon initially denied that all of the client’s work should be recognized for pension vesting and credit. We appealed this decision and ultimately prevailed. Verizon agreed that the client is entitled to a pension of $432 per month when she reaches age 65. The present value of this benefit is over $54,000 and the anticipated lifetime benefit is over $100,000.

It is very unlikely that our client would have been able to get this pension without our assistance, as all the corporate changes and insufficient communication among the corporate successors made it very difficult to piece this all together.

If you would like to request assistance from the Illinois Pension Assistance Project or the New England Pension Assistance Project, please contact us directly by calling 888-425-6067.

August 23, 2013
by Pension Action Center
0 comments

Union Misinterprets ERISA Provision and Improperly Denies an Illinois Retiree’s Pension

A 58-year old Teamster contacted the Illinois Pension Assistance Project because the union pension fund had denied him benefits. The individual had been a member of Teamsters Local 734 and had worked in union covered employment at Hostess from 1987 through 1994. Hostess was a contributing employer to the Local 734 Pension Fund. In June 1994, the man transferred from his union job to a management position with Hostess and remained in that position through 1997. When he inquired into his pension, Local 734 told him he was not vested because he left union covered employment before earning 10 years of service.

Upon reviewing the client’s documents, we realized that Local 734 was misinterpreting the Employee Retirement Income Security Act (ERISA)’s provision for “contiguous non-covered service” and had improperly denied our client’s pension. Under ERISA, a union plan participant continues to earn vesting service if he transfers to a non-union job with a contributing employer as long as there is no quitting or discharge between the periods of union and non-union covered employment.

Since our client had worked continuously for 11 years in both union and non-union covered employment with Hostess, he should have received vesting credit for all of his service. Additionally, his 11 years of service clearly exceeded the plan’s 10-year vesting requirement. We wrote to the union pension fund and clarified that from 1994 through 1997, our client worked in contiguous non-covered service for which he should have received vesting credit. Local 734 reversed its earlier benefit denial and affirmed that our client was eligible for a pension.

Starting at age 65, our client’s will receive a lifetime annuity of $225 per month. The present value of our client’s pension is $25,544.27!

If you would like to request assistance from the Illinois Pension Assistance Project or the New England Pension Assistance Project, please contact us directly by calling 888-425-6067.

August 6, 2013
by Pension Action Center
0 comments

Illinois Man Couldn’t Find the Pension He Earned 29 Years Ago

A 64-year old former employee of Caterpillar contacted the Illinois Pension Assistance Project for help finding a lost pension. A pension becomes lost because a company, has moved, been acquired, merged, or gone out of business. When this happens, former employees approaching retirement age don’t always know how to collect the retirement benefits they earned.

The client worked for Caterpillar from 1972 through 1984 and was told when he left service that he was vested in a pension. However, 29 years later, as he approached age 65, the client was not sure whom to call for information about his benefit.

The Illinois Pension Assistance Project’s staff is experienced in assisting clients with finding current information on who is administering their pension. We gave the client Caterpillar’s contact information and he received a benefit calculation showing that he will receive a lifetime benefit of $220 per month at age 65 in August, 2013. The present value of our client’s pension is $34,083.68!

If you would like to request assistance from the Illinois Pension Assistance Project or the New England Pension Assistance Project, please contact us directly by calling 888-425-6067.

September 21, 2012
by Pension Action Center
0 comments

Improper Plan Administration Almost Costs Widow Her Survivor’s Benefit

The New England Pension Assistance Project recently assisted a 76-year old widow in Stamford, Connecticut. She was living on a modest income and having difficulty obtaining her survivor’s benefits from her late husband’s pension plan. Her husband had died in 2010 at the age of 79 without ever receiving his pension.

The client called us in April of 2011 because she had paperwork showing that her husband was vested in a pension sponsored by the Bunker-Ramo Company, which had been acquired by Honeywell long after his employment had ended. She had contacted Honeywell on her own and had been told she was not entitled to any benefit.

When we contacted Honeywell on the client’s behalf, we were told that the client was ineligible for a survivor benefits because her late husband had failed to file an election form giving her a Qualified Pre-Retirement Survivor Annuity. We realized immediately that this answer was completely inconsistent with the Retirement Equity Act (Section 205 of ERISA), which required that the 50% survivor annuity be the automatic form of benefit payment for any vested participant who was alive on August 23, 1984, and whose benefits were not yet in pay status on that date. It was shocking that the pension administrator was acting in a manner so blatantly incorrect in an area of well-settled law.

We filed a claim for survivor’s benefits in late August 2011, and anticipated a decision within the 90-day framework dictated by ERISA. When we did not receive a response within that period, we began a series of letters and telephone calls that ultimately led to Honeywell admitting in December 2011 that our claim was received. In May of 2012, Honeywell finally agreed to calculate and pay our client the survivor’s benefit retroactive to the date of her late husband’s death.

The retroactive lump sum and the ongoing monthly lifetime benefit, with a projected lifetime value of over $27,000, will have a significant impact on our client’s life and on her economic security.

If you would like to request assistance from the Illinois Pension Assistance Project or the New England Pension Assistance Project, please contact us directly by calling 888-425-6067.

May 15, 2012
by Pension Action Center
0 comments

The Pension Action Center Keeps Up the Fight for Pension Rights

On April 27, 2012, the Pension Action Center wrote to the Internal Revenue Service to advocate for the pension rights of American workers and retirees. The Pension Action Center’s letter was prompted by a request from the American Society of Pension Professionals and Actuaries (ASPPA) that plans be relieved of their legal obligation to notify departing workers of their right to a pension. Click here to read the full text of the Pension Action Center’s letter.

Up until now, the Internal Revenue Code has required pension plans to give departing workers a notice if they have earned a right to a pension. This notice must state how much a worker will receive in pension benefits, how frequently those benefits will be paid, and who is responsible for paying them. ASPPA, which represents the interests of pension plans, sent a letter asking the IRS to relieve pension plans of this requirement.

Notifying departing workers of their right to a pension serves three important purposes. First, the notices inform American workers how much they will receive in pension benefits when they retire. Second, the notices provide clear evidence that a pension plan has deemed an individual entitled to pension benefits. Third, these notices help workers plan for retirement. The Pension Action Center urged the IRS to maintain its existing rule.

The Pension Action Center hopes that the IRS will agree with its interpretation of the law and continue to enforce the right of American workers to receive information about their pension benefits.

The Pension Action Center, part of the Gerontology Institute at UMass Boston, advocates on behalf of pension plan participants and strives to improve their economic security in retirement. The Pension Action Center houses the New England Pension Assistance Project, a pension counseling project funded by the U.S. Administration on Aging that represents workers and retirees in their claims for benefits. Because of its clear focus, the Pension Action Center is a one-of-a-kind organization in New England and is in a unique position to appreciate the importance of these pension notices to American workers and retirees.

Click here to read the full text of the Pension Action Center’s letter to the IRS.

For more information on services provided by the Pension Action Center, visit http://www.umb.edu/pensionaction or call 888.425.6067.

Skip to toolbar