These days, Americans are quick to lament the near extinction of pensions, which continue to be replaced by 401(k) and similar defined-contribution retirement plans. But it turns out some of us do have pensions — we just forgot about them.
Almost $22 trillion remains in pension plans at U.S. corporations, CBS MoneyWatch reports. Finding out whether you are owed a forgotten pension and getting hold of the benefits are both challenging tasks.
For example, CBS interviewed Danny Jo Wright of Austin, Texas, who didn't learn he had a forgotten pension until he applied for Social Security benefits. The Internal Revenue Service informed him of the pension by way of requesting its cut of any pension money Wright collected.
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The IRS knew about Wright's pension because the drug company was required to report on the pension plan — including Wright's Social Security number — to the federal government.
Wright is not alone, according to the Pension Rights Center. The nonprofit's outreach director, Joellen Leavelle, tells CBS:
"We hear from people all the time who wonder if they're entitled to a pension from a previous employer. It's one of our top issues."
The IRS didn't offer Wright help. He says he "spent hours on the phone in frustration and years getting nowhere." It turned out the drug company he worked for had been sold multiple times since he worked there.
But with the help of a pension counselor with the South Central Pension Rights Project in St. Louis, Missouri — who also made many calls on Wright's behalf — he was eventually able to recover $780 a month in pension benefits.
Are you owed forgotten pension benefits?
While recovering forgotten pension funds is no simple task, resources are available to help pensioners. They include:
PensionHelp America: The website of this initiative of the Pension Rights Center is where you should start if you believe you might have a pension plan you forgot about, Leavelle says. Its questionnaire can direct you to resources.
The U.S. Administration on Aging Pension Counseling and Information Program: The South Central Pension Rights Project that aided Wright is part of this program, which offers free legal aid to pensioners in 30 states. A list of the counseling projects that are part of this program is available on the Pension Help America website.
Pension Rights Center (PRC): The PRC website also offers pension-related news, resources and other helpful information.
Pension Benefit Guaranty Corp. (PBGC): The website of this federal agency also offers resources and other helpful information. When a company that promised pensions to employees is sold, closes down or files for bankruptcy, the company is supposed to report it to the PBGC, which maintains a registry of people eligible for such pensions, CBS reports. According to the PBGC, it paid out about $5.6 billion in pension benefits to nearly 861,000 beneficiaries in failed single-employer plans last year.
Do you have any experience trying to recover pension benefits from past employers? Tell us about it below or on our Facebook page.