If you are close to retirement, you may be entitled to a pension from a former employer, assuming you were eligible to participate based on your employment status and certain other requirements. It doesn't matter when you leave the job as long as you are vested in the pension plan.

Vesting refers to the amount of time you must work before earning a right to some or all of your accrued pension benefit. Over the years, your benefit has accumulated in your name under the plan. Studies show that the average American will rely on pension savings for 18 years after retirement. So it's essential that you understand your rights and obligations under your pension plan. Also, if the situation arises, your spouse, ex-spouse, widow, child, or other dependents should know their rights in claiming pension benefits. 
What if the company that set up the pension plan for you is no longer in business? You find out that there was a merger, an acquisition, or a plant shutdown. Does this mean your pension has disappeared and can't be claimed? Lost forever? 

Pension Benefit Guaranty Corporation (PBGC).
Help is available. If your pension plan is a defined benefit plan from a privately owned company, you can contact the Pension Benefit Guaranty Corporation (PBGC). PBGC actively looks for missing participants who are entitled to pension benefits. It's important to note that defined benefit pension plans are traditional pension plans that promise to pay a specific monthly amount to participants when they retire. The amount is commonly based on salary and years on the job. Plans such as profit-sharing and 401(k) plans are defined contribution plans and are not covered at this time by the PBGC. 

The PBGC is a federal agency created under the Employee Retirement Income Security Act (ERISA). The agency currently guarantees payment of basic pension benefits earned by 44 million American workers and retirees participating in more than 31,000 private-sector defined benefit pension plans. Special rules also apply to mergers of multiemployer plans, which are generally under the PBGC's jurisdiction. The PBGC does not insure federal pension plans. 

If your former employer terminated your pension plan earlier due to insufficient funds, the PBGC will pay your benefits. Here's a recent example: If you were a flight attendant with Arlington, Va.-based US Airways, you were one of 51,000 employees at risk of losing their pension. The air carrier could not emerge from Chapter 11 bankruptcy protection unless the pension plans were terminated. The PBGC stepped in and assumed responsibility for the pensions through its pension insurance program. The pensions for all the US Airways workers and retirees were protected, up to the legal limits on insured benefits imposed by the PBGC.

To provide pension benefits, the PBGC receives no funds from general tax revenues. Operations are financed largely by insurance premiums paid by companies that sponsor pension plans and by investment returns.
When a company's pension plan is transferred to the PBGC, the company is sometimes unable to locate persons who participated in that plan and cannot give them any benefits they may be owed. The PBGC can look for them through its "Missing Participants" service. AARP is one of 24 organizations that have agreed to be pension search partners, assisting the PBGC in finding people who have unclaimed pensions and don't know that the PBGC has their pension money. 

PBGC's Web site offers many informative publications about finding your lost pension. The Web site at www.pbgc.gov provides a "Pension Search Directory," listing people who are entitled to pensions. You can also search by company name, by plan sponsor, or by state (for company location). If you find your name on the list, or if you are a survivor of a person listed, call the PBGC toll free at 1-800-326-LOST (1-800-326-5678) or e-mail found@pbgc.gov. The address is PGBC, 1200 K St., N.W., Washington, D.C. 20005. 

Pension Rights Center
The Pension Rights Center is the only national consumer organization dedicated solely to protecting and promoting the pension rights of American workers, retirees, and their families. The Center identifies inequities in America's pension systems, proposes reform measures, and helps employees and retirees understand and enforce their rights. Visit www.pensionrights.org for more information, or e-mail pensionhelp@pensionrights.org. The address is Pension Rights Center, 1350 Connecticut Ave., N.W., Suite 206, Washington, DC 20036. 

Employee Benefits Security Administration (EBSA)
For a listing of regional and district offices of the Employee Benefits Security Administration (EBSA) of the Department of Labor, visit www.dol.gov/ebsa. If you participated in a defined contribution plan such as a profit sharing or 401(k) plan, EBSA may be able to give you advice about how to locate your retirement benefits.

Social Security Administration
If your employment ends and you have a vested pension benefit that you are not eligible to receive until later, the plan will report that information both to you and the Internal Revenue Service, which, in turn, will inform the Social Security Administration. For more information about this deferred vested benefit, call the Social Security Administration toll free at 1-800-772-1213.

When you're figuring out your retirement income, don't forget any pension plans from a former employer. Your benefits may be waiting for you in the "Lost and Found." 

This column is meant to provide general financial information; it is not meant to substitute for, or to supersede, professional or legal advice.
Note: The content areas in this material are believed to be current as of this printing, but, over time, legislative and regulatory changes, as well as new developments, may date this material.

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