Help is available to secure your pension

Whether your retirement is close at hand or years away, you’re likely counting on savings and other income sources you’ve maintained to provide you with a comfortable and secure life after working for years. If you’re counting on a pension, take steps now to make certain it’s in place and available when you decide to retire.

A defined benefit pension is a retirement plan that may provide monthly income for the rest of your life. Pensions are sponsored by your employer and provided to you based on your years of service, compensation and other factors. Unlike a 401(k), the employer bears all of the risk and responsibility for funding the pension plan. But, employers can make mistakes.

Take the case of William, a Pension Action Center client.

William worked for a company outside of Chicago off and on for about 20 years. He had two breaks in service that resulted from factory-wide reductions in force. After the first layoff, he was recruited back, because the factory needed someone with his specialized skills. When he was laid off again, he had worked about 12 years in total, and was fully vested in the company’s pension plan.

In the mid-1980s, the company that owned the factory decided to close it down permanently. The company again recruited William back to help with the closure. He understood that his brief return would increase his pension benefit at retirement.

But the employer made a big mistake. When personnel matters were wrapped up for the remaining factory employees, William’s service credit for his pension was recorded based on his short return to his employer to close down the factory. The employer did not credit him with the 12 years of service from earlier in his career. As a result, William was not included on the list of employees who had earned a pension.

A few years later, the pension plan was terminated entirely, and the employer purchased a group annuity contract with an insurance company to cover the remaining pension benefits owed. But because William was omitted from the list of former employees with pensions, he also was left off the group annuity contract.

When William reached retirement age, his pension benefit was nowhere to be found.  That is where the Pension Action Center (PAC) stepped in.

“Our client’s story is all too common,” says Anna-Marie Tabor, Director of the Pension Action Center at UMass Boston’s Gerontology Institute. “Mistakes happen, and people slip through the cracks.”

PAC provides free legal counseling and representation to people living in one of the six New England states and Illinois. Staffed by experienced lawyers and pension counselors, they help people understand their legal rights and claim the retirement benefits they have earned. These services are free of charge to anyone with a pension problem, regardless of age or value of the claim. PAC has successfully helped people recover more than $60 million in retirement benefits to date.

“Unfortunately, there are many people like William, who worked difficult jobs and are told they would receive a pension as part of their compensation when they retired,” says Tabor. “Unfortunately, companies don’t always live up to their promise. They may go out of business or be sold and folded into another company. The companies themselves or their pension plans go through complicated transactions that aren’t always completed as accurately and carefully as they need to be. The end result is that individuals may not get the benefits they were promised years ago.”

In William’s case, PAC successfully made his case to the Pension Benefit Guaranty Corporation (PBGC), a federal agency that protects pension benefits for the private sector. William was awarded the pension he was entitled to and the payments he had missed, with interest.

If you find yourself among employees who haven’t received their pension benefits, you shouldn’t give up on the money you’re owed without seeking PAC’s help.

“William’s case illustrates why someone needs the help of an advocate in order to receive their benefit,” says Tabor. “It’s hard for people to advocate for themselves.”

There are several steps individuals can take to protect themselves.

“Keep all your pension documents,” says Tabor. “You may need them down the road. But even if you’ve lost the original documentation, that doesn’t change your entitlement to a pension.”

Other steps include:

  • When you leave a job, make sure your contact information is accurate and up to date with any company that owes you pension or retirement benefits.
  • Review the annual disclosures from your company and save a copy for your own records.
  • Keep copies of your tax returns indefinitely. Although many people throw old tax returns away, if you have a pension, you may need them in the future.
  • Keep your benefits statements from the plan and any official plan documents such as the summary plan description, or statement of deferred vested benefits. If your employer makes a mistake in your records, it will be easier to document your entitlement to a benefit.

If you live in New England or Illinois, the Pension Action Center may be able to help you to ascertain if you’re entitled to a pension, and work on your behalf to see that you receive this valuable benefit.