Finding a Lost Pension

First, Is It Worth Looking?

Vesting. The most important question to ask yourself at the outset is whether you know that your work for this past employer entitled you to a pension. Another way to put this question is this: Were you vested in the pension plan at the time that you left the job? Being vested means that, no matter when you leave the job, you are eligible for a pension at retirement age. You may have left the job 20 years ago, but if you were vested then – assuming the pension fund still exists – you are entitled to pension benefits.

Today, most pension plans require 5 years of service, or employment, before vesting. But prior to the mid- 1980s, plans typically required 10 years and, prior to the mid- 1970s, 20 years. Before 1976 plans could require that you keep working for the same employer until you actually retired. If you don’t know for a fact that you were vested in the pension plan, and you only spent a few years on the job, the chances are slim that you are entitled to a benefit.

Rules of Eligibility. Every private pension plan’s rules of eligibility are contained in a document called a summary plan description (SPD) that is supposed to be given to every worker at the time he or she joins the plan. As the rules change, the worker should periodically receive an updated document. The rules that are in effect at the time you leave the company are the rules that determine whether you have a pension or not. Changes in the rules after you left the company usually do not apply to you.

Summary plan descriptions were required only after Congress passed the federal Employee Retirement Income Security Act (ERISA) in 1974. In some cases, however, comparable company documents are available for earlier plans especially in the case of pension plans that were developed in negotiations between management and a union.

When You Left. It matters whether you left the job prior to 1976 (see the box on page 8 on “Legal Protections”). If you left after 1975, you have more rights under federal law. However, even workers who left before ERISA became effective for their pension plans are sometimes able to collect their pensions if they can locate the pension fund and meet the requirements of the plan.

Spouses’ Rights. In most traditional, or defined benefit, pension plans there is a “joint and survivor” option, meaning that the worker’s spouse can be entitled to a benefit. If this option is selected, and the spouse survives the worker, pension payments will continue, usually at a reduced amount, for the rest of the spouse’s life. In addition, many plans provide pre- retirement survivor coverage. Therefore, as a surviving spouse it may be worth looking for a pension your husband or wife earned.

Under the Retirement Equity Act of 1984, a worker in a traditional plan cannot elect an option other than the “joint and survivor” option without the written agreement of the spouse. This protection does not apply to profit sharing or 401( k) plans, or to individual retirement accounts.

What You Are Looking For

The object of your search is the pension plan that you were part of – or its successor. Broadly speaking, here is what may have happened to your benefits:

Your job will be to trace the history of the pension plan from the time you left the job to the present. This may be as simple as finding out where your old company has moved, or it may be as difficult as piecing together a complicated story of corporate mergers and bankruptcies. The sources of help may well be necessary in your search.

Once, private pensions were almost entirely unregulated. It was not at all uncommon for a worker to reach the end of a long working life and find that his or her nest egg, in the form of an ample pension, had completely disappeared. In 1974 Congress passed the Employee Retirement Income Security Act (ERISA). This law, and other reforms enacted since 1974, established broad protections for many workers. The Department of Labor monitors pension plans to make sure they are solvent and are being responsibly managed. The Internal Revenue Service (IRS) also qualifies and regulates pension plans.

ERISA established PBGC, a federal agency that oversees the termination of defined benefit pension plans so that workers are not deprived of their accumulated benefits.

However, not all pension plans are protected by these federal laws. Here are the major exceptions to ERISA’s safeguards:

	Only private- sector workers are protected, not employees of the federal government or state or local governments.
	The ERISA protections are not retroactive: that is, they do not apply to workers who left their companies prior to the effective date of ERISA. For most plans this is 1976, but for union plans (multiemployer plans) it may be later. Nonetheless, it is important to know that in some cases, if a person terminated employment before the effective date, but satisfied the provisions of the plan and is vested, he or she may be due a benefit.
	PBGC only insures private sector defined benefit pension plans.