By Sandra Wisnewski, Director of the Mid-America Pension Rights Project at Elder Law of Michigan
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 3)
In my last blog, I discussed how to determine who to contact to start your benefit. In this post, I will discuss the law that mandates most pension plans.
The law that mandates private pension plans is called the Employee Retirement Income Security Act, commonly referred to as ERISA. ERISA does not apply to government and church plans. I have talked to many people over the years who think that ERISA is an entity that you can call, it is not an entity. ERISA is Federal law that was written by our legislatures and implemented in 1974. ERISA is interpreted by the Department of Labor (DOL) and the Internal Revenue Service (IRS). So, when a pension issue arises, ERISA, DOL regulations, IRS regulations, and case law must be examined to get a legal answer to a pension question. This is not an area of the law that is easy to follow or interpret. Neither does interpretation come from reading one or a few sentences from any one of these resources.
Even though church plans and government plans are not governed by ERISA, these pension plans must follow their own plan rules. These rules are like a contract between the employee and employer. There are two documents that are necessary to determine if a plan is following their plan rules, the Summary Plan Description (SPD) and the Plan Document. With government plans, statutes may dictate these plan rules.
The SPD is exactly what the title says, a summary of the plan. This document does not contain all the information that you may need but may answer some of the minor questions like, how many years and hours do I need to vest in the plan. In contrast, the Plan Document contains all the details of the plan. The Plan Document is usually very thick. If a discrepancy arises between the SPD and Plan Document, case law indicates that the Plan Document is the final say; however, there are exceptions to this ruling.
These documents are updated from time to time. Some companies update pension plan rules frequently and some rarely make changes. The version of the SPD and Plan Document that applies, is the one that was in affect the year that you physically left employment. When asking for these documents, pursuant to ERISA, you must ask for them in writing. We always advise that the written request be sent by certified mail, return receipt requested to prove that it was received by the company. Once the letter is received, a phone call to the plan every 30 days to check the status of your case is beneficial in moving the case along. Pursuant to ERISA, there are timelines and rules the employer must meet in getting this information to the former employee.
Once you receive the documents requested, you can now verify what the plan is telling you, trust but verify. These documents should be kept someplace safe along with your paperwork, for future reference. If you have further questions, these should be done in writing as well.
In our next blog post, we will discuss the risk of raising pension issues without legal counsel.
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 16,000 clients and has recovered over 81 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.