Pension Surprise

[Bigal50]

I ER'd at 58 earlier this year I cashed out my pension a month ago from MegaCorp. My intent was to get it all, and that was my instruction.

My account always showed about 70k on the pension page and a larger total when the frozen portion from previous owners was added in. (Total about $190k)

When I check my account now, it shows I still have $70k balance with MegaCorp. I think it's a mistake. There are no 'buttons' or links to withdraw that money as there were a couple of months ago before I initiated the pension transfer.

I think the $70k is a mistake. But the account is still gaining interest! Should I let it ride to age 65 hoping that they never find it, or should I try to get it out now.

I'm looking for the best plan to retain the 'extra?' 70k.

Your thoughts?

 

[W2R]

How perplexing!

Maybe ask Megacorp about it?

 

[REWahoo]

I doubt the pension plan administrators will allow a $70k "oops" to benefit you whether you inquire now or wait.

 

[bjorn2bwild]

This happened to DW too when she took the lump sum.
As REWahoo commented, the mistake was quickly noticed and corrected. The account was with Merrill Lynch.

 

[youbet]

Contact the administrators of the plan and have them investigate to determine what's going on. There is zero future in "letting it ride."

 

[Ready]

Maybe you really put away more money than you thought!

 

[Bigal50]

There is zero future in "letting it ride."

My thought was that if I contact them now, they would be more likely to find it. As time goes on, my hope is that it would become a rounding error.

I would appreciate your thoughts on why I should call the now.

 

[Mulligan]

Contact the administrators of the plan and have them investigate to determine what's going on. There is zero future in "letting it ride."

I would agree. I have read stories in the past where pension overpayments have been caught years down the road, and they got to claw it back. You would always have that hanging over your head. I personally would want confirmation either way. I personally had a small experience with this. After I received my first pension payment, they notified me that they had overestimated by monthly benefit by $150. They deducted it immediately out of the second check. I am glad they didn't catch this later as it would have been more painful for me on the subsequent payment withholdings.

 

[Texas Proud]

I would agree. I have read stories in the past where pension overpayments have been caught years down the road, and they got to claw it back. You would always have that hanging over your head. I personally would want confirmation either way. I personally had a small experience with this. After I received my first pension payment, they notified me that they had overestimated by monthly benefit by $150. They deducted it immediately out of the second check. I am glad they didn't catch this later as it would have been more painful for me on the subsequent payment withholdings.

I think you read it backwards as I think his stmt shows he still has $70K left at mega.... but as always, I could be wrong...

 

[Texas Proud]

Did you put money into the plan that makes this $70K

If not, then they might have a restriction on you taking the money out early... they followed your instructions of sending you all the money they could.... but this had some kind of restriction...


A call to them is the best way to find out.... you either own it or you do not... a call will not change ownership....

 

[RunningBum]

Google "pension overpayment" and you'll find at least some cases where the company or pension administrator went back to the receiver to get the money. That really stinks for someone who didn't realize they were being overpaid, but I'd have zero sympathy for someone who knew they got too much and just stayed quiet.

Besides, you might be wrong and the money really is yours. If that's the case, it'd be nice to know it now so you can include it in your plans.

 

[sunnysideup]

At some point in time an audit could catch this. One company I worked for had my pension projection wrong for 2 years and then it was corrected. Since I was still working I new it would be so or would have asked for them to review it prior to expecting the payments.

I also feel that it is risky to ignore what you perceive to be an error in your favor. If you contact them and they say it's correct--hooray for you and keep that paperwork. If they correct the error now, you may have saved yourself lots of money and headaches...

Good luck!

 

[Walt34]

I also feel that it is risky to ignore what you perceive to be an error in your favor. If you contact them and they say it's correct--hooray for you and keep that paperwork. If they correct the error now, you may have saved yourself lots of money and headaches...

Good luck!

The legal term is "unjust enrichment". Even if it was their mistake and they don't catch it for years they are entitled to get it back. Especially if they can show you knew about it and kept quiet.

That could really ruin retirement plans 20 years from now. I suppose a statute of limitation may apply but why have that hanging overhead?

I had a couple of fraud cases where banks made deposits to the wrong account (very rare!) and the recipient thought it was mana from heaven and spent it. Well, no.

 

[KingB]

I think the $70k is a mistake. But the account is still gaining interest! Should I let it ride to age 65 hoping that they never find it, or should I try to get it out now.

I'm looking for the best plan to retain the 'extra?' 70k.

Your thoughts?

Put yourself on the other side.
If someone shortchanged you, are you going to wait or complain right away?

 

[Calico]

My thought was that if I contact them now, they would be more likely to find it. As time goes on, my hope is that it would become a rounding error.

I would appreciate your thoughts on why I should call the now.

Because it's the right thing to do?

 

[LARS]

Because it's the right thing to do?

That's too simple but I completely agree

 

[Texas Proud]

I hope the OP will clear this up....


I think that the money is still with mega....

A lot of posters think that mega sent it to the OP...

Big difference in these two possibilities....

 

[enjoyinglife102]

I don't even see any other option other than to correct the error if there is one. To consider anything else because you might get away with it is shameful.

 

[Animorph]

My understanding of the OP is that Bigal50 cashed out the pension, got the money I assume, but noticed the account balance on the web site wasn't updated for the cash out. Other than no buttons show up to withdraw the money. Plus, it is still adding interest to the account.

I would assume that MegaCorp just hasn't fully updated what should now be a closed account. An almost stale website is not quite the same as one that indicates there is still $521.55 still in the account (or -$521.55). Maybe they'll get around to it in the next few months, or maybe the account will just eventually disappear.

Trying to get it out now (again) will probably require a call (no buttons on the web page), and the person at the other end will probably have the correct info.

 

[Texas Proud]

My understanding of the OP is that Bigal50 cashed out the pension, got the money I assume, but noticed the account balance on the web site wasn't updated for the cash out. Other than no buttons show up to withdraw the money. Plus, it is still adding interest to the account.

I would assume that MegaCorp just hasn't fully updated what should now be a closed account. An almost stale website is not quite the same as one that indicates there is still $521.55 still in the account (or -$521.55). Maybe they'll get around to it in the next few months, or maybe the account will just eventually disappear.

Trying to get it out now (again) will probably require a call (no buttons on the web page), and the person at the other end will probably have the correct info.

OK, so your thinking is also my thinking.... he did not get the $70K from them....

That would still leave the question of what is that $70K.... one answer is that it is a mistake.... another answer is it is his funds but restricted and he cannot get it out.... hence, why they did not send it to him...

Either way, this means he does not have to worry about paying it back... which a number of posters have indicated he might have to do...

 

[RunningBum]

Either way, this means he does not have to worry about paying it back... which a number of posters have indicated he might have to do...

I can't speak for anyone else, but I assume at some point in the future he would try to get that money that still shows up as a balance in his account at megacorp or their custodian. Even if he is successful, if it's not really his, and they could come back to him later to get it. That's what I was talking about. So, he might as well find out now whether it's their mistake, or if it really is his money that he can plan on getting.

And if it is rightfully his, he can ask why they didn't send it all to him when he asked for it all.

 

[Texas Proud]

I can't speak for anyone else, but I assume at some point in the future he would try to get that money that still shows up as a balance in his account at megacorp or their custodian. Even if he is successful, if it's not really his, and they could come back to him later to get it. That's what I was talking about. So, he might as well find out now whether it's their mistake, or if it really is his money that he can plan on getting.

And if it is rightfully his, he can ask why they didn't send it all to him when he asked for it all.

I agree 100% with this... he should find out what it is.... real or fake...

And he should find out why he cannot get it now.... if it is real...

Since he did not get it when he asked for all his money to be distributed.... and it is real.... then they has to be some kind of restriction on it....

Now, if it is not real.... and he is hoping that many years from now he might be able to get his hands on it and let time be on his side (if they don't catch it now, what is the likelihood of them catching it in 15 or more years), then waiting might be what he wants to hear.... I would not do this, but there are people who would....