A Working-Class Program that Works to Solve Your Pension Problems

The Mid-America Pension Rights Project (MAPRP) assists clients with pension and 401(k) issues. There are no age or income restrictions and there is never a charge for the services. The Pension Project works to find answers and solutions to your pension-related problem.

I Want to Begin Receiving My Pension Benefit, Where do I Start?  (Part 1)

By Sandra Wisnewski, Director of the Mid-America Pension Rights Project at Elder Law of Michigan

I have been working with clients who have pension issues for over 11 years. When I first started, I thought there would be no clients. After all, what could possibly go wrong with the collection of a benefit that was earned and well documented? I must admit, looking back, it was a bit naïve. The biggest lesson I have learned is, for the most part, companies try to do the right thing and records really do get lost. Although computers are mostly used for record-keeping these days, there are still plans that maintain physical boxes of files. Going into the dark, dank storage facility to look for paperwork, unbelievably still exists.

As time marches on, there has been a definite changeover in pension plan types. The trend is phasing out defined benefit plans and offering employees contribution plans. A defined benefit plan is the one that my father has which are now becoming dinosaurs. The employer pays into it promising a determined monthly benefit. These plans were what the big 3 and most employers offered for employees. Essentially, all the employee had to do was to stay around long enough to vest. The risk is all on the employer with these plans. When the stock market dips, the employer is the one that takes the hit. The employer is still on the hook for paying the promised monthly amount. A significant amount of employers do not provide these kinds of plans anymore because of the risk and cost of maintaining. Currently, the Pension Benefit Guaranty Corporation (PBGC) is the government entity that insures and tracks most private defined benefit plans. 

Nowadays, contribution plans are the trend. These are typically 401ks. The employee contributes to the plan and sometimes the employer matches up to a certain percentage. The risk is all on the employee. When the stock market dips the employee takes the hit. When retirement occurs, your payout is what is left in your own personal 401k account. Currently, the Department of Labor (DOL) is the government entity that tracks these plans. Unfortunately, these plans are not insured by the government.  When a contribution plan is formed the employer is supposed to complete and update a 5500 form for the DOL. These completed forms give people, who are searching for the pension plan, the necessary information to contact the current plan administrator.  Unfortunately, many of these forms are not complete, not updated by the employer, and no one is consistently policing these records. Therefore, when a former employee loses track of their 401k it is very difficult to find. Anyone can go to 5500search.dol.gov to search for a former employer’s pension plan information and its current location.

Keeping old paperwork from the employer or statements from the plan are very important records. Copies of Federal tax filings, timesheets, and paystubs are also important to hang on to if a problem arises before or after retirement. Also, keeping a copy of election forms when you signed up for the pension is important. These documents will help to prove participation in the plan, hours worked, election choice, and whether a lump sum was paid at the time of leaving the company. 

In our next blog post, we will discuss who to contact to receive your pension benefit.

The Pension 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. 

Since the program began in 1998, the Pension Project has assisted over 15,000 clients and has recovered over 78 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 Mid-America Pension Rights Project.

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.  

Sandra Wisnewski is the Director of Legal Services at Elder Law of Michigan. Sandra has been a staff member of the Elder Law of Michigan team since 2010. As Director of Legal Services, Sandra manages the day-to-day operations of the pension department and helps clients who call for pension assistance.