Pension Plan from former Employer

[Cassius King]

I have a pension plan with a soon to be former employer. I'm fully vested and 36 years old. I've already signed on with another firm, so I'll be working for them shortly.
Are there any options in regards to this pension? Is it stuck there until I retire, if the company doesn't close the pension? I don't think I can do anything with it, but my research has been unclear.

Thanks for your responses/help.
-The Dude

 

[ziggy29]

Is it traditional defined-benefit plan? If so, it would be "stuck" there until you start collecting on it unless they have a lump-sum cash out option which (if you preferred) you could take out and put into another retirement account such as a rollover IRA and/or an immediate annuity (stay away from junk like variable annuities and equity-indexed annuities; the only annuities that don't stink are the immediate annuities that trade a lump sum investment for a lifetime income stream, and even they aren't for everyone).

Then again, if you were going to annuitize it, it's not likely the taking the lump sum would be advantageous -- but it would be worth doing the math to confirm it.

 

[Telly]

I was right around your age when a pension plan (defined benefit) that I was enrolled in was buttoned up when I moved on. I figured by the time I got to take it in the far future, that inflation would reduce it to pocket change (that was youth speaking!).

I kept track of it as it was passed from one company to another as operations were sold, divided, resold, etc. I kept a file of all of the documents I received, like personal account info, pension fund annual reports, where the service center was for it at that time, and how to reach them, plan booklets, etc. I was worried that with all the passing around, that it would disappear. The last move was to a large US company that has a whole boat load of different plans. Can't tell them apart without a program . I recently claimed on it, now get monthly payments, after all those years!

So I guess my advice is: Keep records! Keep everything they send you, and read it, in case they pass it on elsewhere. And keep them, whoever "them" will be over the years, updated with your current address. You earned it, don't lose it to a lack of maintenance.

 

[Alan]

as Telly says, keep good records and don't let them forget you.

I have 2 deferred pensions like you describe, both with UK companies. One of them no longer exists but the company that bought them will still pay me a COLA'ed pension at age 65 and the other I decided to take early at age 50 (5 years ago) and get 220 pounds a month ($4,000 / year) from them.

The first company I worked for from age 24 to 30 and have been getting $4k/year for the last 5 years, and the other firm I worked for them from age 30 to 37. I get a statement every year from them showing projected income at age 65, plus details of how the fund is doing etc, similar to what US firms also have to do by law. currently is worth ~$9k/year so well worth pursuing.

So, be sure to write to them every time you change address and if you don't receive an annual statement, request one.

 

[ziggy29]

as Telly says, keep good records and don't let them forget you.

Indeed. I have an old, frozen pension from a previous employer (the freezing and the elimination of retiree health insurance played major parts in my leaving) and not only do I keep statements and print out stuff from their web site, I log in at least once a quarter and make sure I'm still in their system and print out estimated benefit statements at age 55, 60, 62 and 65. Plus I confirm all my contact information is accurate.

It's not much -- less than $650 a month at age 65 in 2030, not inflation-adjusted -- but even then it will probably beat a sharp stick in the eye.

 

[mickeyd]

I have a pension plan with a soon to be former employer. I'm fully vested and 36 years old. I've already signed on with another firm, so I'll be working for them shortly.
Are there any options in regards to this pension? Is it stuck there until I retire, if the company doesn't close the pension? I don't think I can do anything with it, but my research has been unclear.

Thanks for your responses/help.
-The Dude

If it's a qualified plan,the specifics are covered in the Summary Plan Description and Plan Document (both required by the feds). Read those docs and it should show you the way. (Employer is required to provide you with docs). Most DB plans are very inflexible. You are probably stuck with it "as is". As mentioned earlier, don't forget about it when you approach 65 (or whatever the magic age is). I am currently receiving an income stream from two long ago jobs and it's nice to have a steady income every month.

 

[Cassius King]

Thanks for the info! I'll definitely stay on top of it and keep updated records.

 

[Snidely Whiplash]

I get a statement every year from them showing projected income at age 65, plus details of how the fund is doing etc, similar to what US firms also have to do by law.

I am fully vested in a retirement plan from a medium sized US municipality but since having left their employ I have not received any information / communication from them (I haven’t moved). I wasn’t aware that I should be receiving anything as you have stated above, can you provide additional information on what law and the requirements you are referring to?

 

[Alan]

I am fully vested in a retirement plan from a medium sized US municipality but since having left their employ I have not received any information / communication from them (I haven’t moved). I wasn’t aware that I should be receiving anything as you have stated above, can you provide additional information on what law and the requirements you are referring to?

Take a look at the ERISA Laws

I get a plan summary every year from all 3 of the companies that owe me or are paying me a pension.

Title I: Protection of Employee Benefit Rights
Title I protects employees' rights to their benefits. The following are some of the ways in which it achieves that goal:
Participants must be provided plan summaries.
Employers are required to report information about the plan to the Labor Department and provide it to participants upon request. The information is reported on Form 5500, which is available for public inspection and may be viewed at websites such as freeERISA.com and Free5500.com.
If a participant requests, the employer must provide the participant with a calculation of her or his accrued and vested pension benefits.

 

[Leonidas]

Take a look at the ERISSA Laws

I get a plan summary every year from all 3 of the companies that owe me or are paying me a pension.

Except the poster referenced a municipal pension and government plans are not subject to Erisa.

 

[Alan]

Except the poster referenced a municipal pension and government plans are not subject to Erisa.

Ah, my mistake

 

[Snidely Whiplash]

Except the poster referenced a municipal pension and government plans are not subject to Erisa.

Ah, my mistake

OK, so it appears I'm out of luck. But this thread has got me thinking about the whole thing, so I'd like to call and get additional information. I have a statement of benefits I received when I left their employ - what should I consider asking for when I call my ex-employer?

As always, I very much appreciate the help from those more knowledgeable on this matter.

 

[Leonidas]

OK, so it appears I'm out of luck. But this thread has got me thinking about the whole thing, so I'd like to call and get additional information. I have a statement of benefits I received when I left their employ - what should I consider asking for when I call my ex-employer?

As always, I very much appreciate the help from those more knowledgeable on this matter.

Just let them know who you are and what your situation is and that you want to stay connected and informed. They might have a website, email list, or just a regular newsletter that keeps plan participants informed - get on the distro list so you keep up to date. Maybe get a copy of any plan changes, in case something alters what you already have, etc.

I know my plan keeps track of the vested employees who are no longer employed but will get a reduced pension when they turn 60. No clue how they do it, but the number is included in the annual reports.