Tips for Keeping Track of Your Pension
Each year the Pension Rights Center gets calls and e-mails from retirees asking for help. Many are seeking a pension plan that was “lost” because their former company moved or merged. We also hear from workers who need help proving that they worked long enough to qualify for benefits. Other people come to us because their pension payments are less than the amounts they thought they had earned.
How can you avoid these problems? Below are some general tips on how to protect and keep track of your private pension benefits. Some of these tips may also be useful if your pension plan is a profit sharing, money purchase, 401(k) or 403(b) or governmental employee plan. Use the links below to find out what you can do to keep track of your pension benefits:
While You are Working
- Keep records of your employment history, all correspondence, and any notices or documents relating to the retirement plan and your benefits.
- Find out the rules of your plan by reading a copy of the Summary Plan Description (SPD).
- Check the individual benefit statements you receive for accuracy. Is the plan crediting you with the correct number of years of service? Do the statements show all the contributions you have made?
- Ask if there are restrictions on your ability to work after you start collecting your retirement benefits. Find out if part of your Social Security benefits will be subtracted from your pension.
- Check on your plan’s funding status by reviewing the funding notice that is provided annually. You can also request the financial form the plan files with the government each year (the Form 5500).
- Contact your plan administrator to find out if your plan provides cost-of-living adjustments for pensioners.
If You Leave an Employer Before Retirement Age
When You Retire
- Generally you must apply for benefits in order to begin receiving your pension.
- Read all forms you are asked to sign very carefully. For example, you may be asked to choose between taking your pension as lifetime payments or as a single lump sum. In some cases the lump sum may be worth much less than the lifetime “annuity” payments. Similarly, if you are married, you and your husband or wife may be asked to choose between benefits that will be paid over both of your lives, or only for your life. These choices cannot be changed after you retire, so it is important to take the time to read and understand these forms.
- Upon reaching retirement age, check the accuracy of your company’s benefit calculation. If the company’s calculation seems incorrect, you should contact the plan administrator immediately.
- Even after retirement, you should still keep your most important records in case an issue arises later.
If Your Plan is Terminated
- If your pension plan is terminated, find out who will be administering the pension plan and get their contact information from your former employer. If the plan is a traditional defined benefit pension plan and had enough money to pay all promised benefits, a life insurance company will pay your benefits. If the plan is terminated without sufficient funding, the Pension Benefit Guaranty Corporation (PBGC) will likely take over the plan. The PBGC guarantees benefits in most traditional pension plans, but not all benefits are protected. See our fact sheet summarizing the guarantee limits.
For more information on how to keep track of your pension, read this fact sheet.
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