Mid-America Pension Rights Project: What happens to my pension if my pension plan terminates and how can I protect it? (Part 2)

By Christine Steinmetz, Pension Attorney at the Mid-America Pension Rights Project at Elder Law of Michigan

In my last blog post, I discussed the Pension Benefit Guarantee Corporation, commonly referred to as the PBGC. Most private defined pensions are insured by the PBGC. In this post, I will discuss how you can protect your private defined pension benefit.

If the PBGC insures a private defined benefit pension plan, then the PBGC will trustee the plan when it terminates. The PBGC also has the power to terminate a private pension plan to protect the interests of the participant. If a plan terminates and they are unable to locate participants of the pension plan, then the plan will turn the pension benefits over to the PBGC. The PBGC holds many unclaimed private pensions that workers have forgotten, or the plan was unable to locate the worker because he or she moved.

So, what can you do to protect your private defined pension benefit? One thing you can do is to keep good records. You will want to keep your W-2 forms, pay stubs, individual plan benefit statements, any notices that state that you are vested in the plan, tax returns, exit letters stating that you participated in the pension plan, and any official plan documents to prove that you are owed a benefit.

In addition, you will want to contact your past and present pension plans and keep them informed of any changes. You will want to provide them with your updated address, phone number, email address, name, and marital status.

After you leave a company, it is important that you keep an eye on your former employer. Your former employer could file bankruptcy, merge with another company, relocate, or terminate the company making it difficult for you to locate your private defined pension benefit. If you keep track of your former employer and keep detailed records, then it will be easier for you to locate your pension when it is time for you to retire.

If you have questions about your 401(k) or defined benefit pensions, please call the Mid-America Pension Rights Project. The Mid-America Pension Rights Project is funded by the Federal government through a grant provided by the Administration for Community Living, and is a program of Elder Law of Michigan, Inc., a 501(c)(3) non-profit organization.

Since the program began in 1998, the Pension Project has assisted over 15,000 clients and recovered over 76 million dollars in pension benefits. The Pension Project assists clients that either worked in or are currently living in Indiana, Kentucky, Michigan, Ohio, Pennsylvania, and Tennessee. For more information, visit www.mid-americapensions.org.

If you need help with or information about your pension or 401(k) benefit, please call the Mid-America Pension Rights Project at 866-735-7737 to schedule an appointment with one of our experienced attorneys.

The information in this article is general and not intended to be a substitute for legal advice. In any legal matter you should always consider consulting with an attorney for specific advice.  

Christine Steinmetz is a part-time Attorney at Elder Law of Michigan and has been a member of the Elder Law team since 2011. As an attorney at Elder Law, Christine advises clients on pension benefits issues.