Forgotten Retirement Benefits
Elaine Bedel established Bedel Financial in 1989 in Indianapolis.
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As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowHow many jobs have you held during your work life? Chances are more than a few. Have you kept track of your retirement benefits from each employer? Almost $300 million of pension funds are unclaimed! If this raises a concern for you, there are resources available to assist.
You may know someone who is retiring from the same employer after 30 to 40 years. However, that is definitely not the current trend for the Millennials or Gen X, Y, or Z. Even the younger baby boomers (born between 1957 and 1964) held 11.7 jobs between ages 18 and 48, according to the Bureau of Labor Statistics. It’s easy to see how retirement plan benefits could slip off the radar with multiple employers over a 40-year working career.
While you may find it hard to believe that anyone would forget about money in an account or an earned financial benefit, there are many unclaimed 401k accounts and pension benefits waiting for their rightful owners. Unfortunately, companies aren’t pro-active. It is up to the employee to do the research and legwork.
Here are a few tips on finding your lost or forgotten benefit:
Need Help Locating Your 401k or Pension?
Before you start researching, check your own files for account statements, benefit estimates, termination forms, and other references to your plan. There are rules governing retirement benefit plans that require you to receive various notices. These notices may include your balance and options to receive funds as well as the official plan name and who the company hired to administrator the plan.
First Step: If you are not receiving information on a regular basis, contact the human resources department of your former employer. It may simply be an old address preventing the delivery of your statement or notice of benefits. If your employer was sold to another, seek out the new company for information and guidance. If your former company is no longer in business, you will need to take additional action.
Next Step: Go to the Department of Labor. The DOL creates the rules and has oversight of all qualified retirement plans, which includes 401k and pension plans. The department provides an online search function of all their archived information. From the various plan filings (the most common is a Form 5500), you can research plans by name of company or plan administrator. This can prove helpful in locating the company currently responsible for the plan if your employer has changed its name or ownership.
Last Resort: If you are unsuccessful in finding your information, several private companies have attempted to fill the gap. While some require payment of a fee, PenChecks, Inc., has established a national registry of unclaimed benefits (www.UnclaimedRetirementBenefits.com) that is free to the public.
Also check with the unclaimed property records for the state in which you worked and/or where the company was headquartered. In Indiana, the Attorney General’s office maintains www.indianaunclaimed.gov for this purpose.
What if Your Company Went Bankrupt?
The Pension Benefit Guaranty Corporation (PBGC) insures corporate pension plans and makes payment to retired employees of bankrupt companies. The PBGC website, http://www.pbgc.gov, provides a search tool for seeking plan data along with other helpful information.
Summary
Is it worth looking for a lost retirement benefit? Yes! According to the PBGC there are over 38,000 individuals who have not claimed pension benefits worth over $300 million. And, the average value of a lost 401k account is $42,000.
While it may take time, the outcome of this endeavor can certainly have a positive impact on your retirement lifestyle.
Contributions were made to this article by Ryan Jeffries, CFP, Manager of Financial Planning at Bedel Financial Consulting, Inc.
Elaine E. Bedel, CFP, is CEO and president of Bedel Financial Consulting, Inc., a wealth management firm located in Indianapolis. She is a featured guest each Wednesday on the WTHR (NBC, Indianapolis) Channel 13 News at Noon, "Your Money" segment. Elaine’s book, "Advice You Never Asked For…But wished you had," is available on Amazon.com. For more information, visit www.BedelFinancial.com or email Elaine at ebedel@bedelfinancial.com.