It's not every day you get good
news from the IRS. But that's exactly what happened to Danny Jo Wright of
Austin, Texas, when he applied for Social Security in 2013. In a letter from
Social Security, the IRS informed him he was entitled to a pension from the
drug company he had worked for years ago.
Wright had no idea the pension
was coming to him, even though he thinks he deserved it. He had crisscrossed
Texas for 12 and a half years selling products like Lysol to hospitals,
schools, hotels and the University of Texas, and earned a reputation as a top
But he moved on. And so did his
company. His division was repeatedly sold and resold to other corporations.
The only one who remembered the
pension was the IRS, because the company Wright worked for by law had to report
on the plan -- including his name and Social Security number -- to the agency.
The IRS wasn't interested in helping Wright acquire his pension. It just wanted
its cut when he did collect.
Wright found this out when he
called the IRS. He said he got the usual run-around. So, he called Social
Security. Same thing. He then researched and found the myriad of companies that
had bought his division. But none of them would own up to having any records on
a Danny Jo Wright. They had lost track of him years ago.
"I spent hours on the phone
in frustration and years getting nowhere," complained Wright.
He had joined a very sizable
club. "We hear from people all the time who wonder if they're entitled to
a pension from a previous employer," said Joellen Leavelle, outreach
director of the Pension Rights Center (PRC) in Washington, D.C. "It's one
of our top issues."
And it should come as no
surprise. Despite the fact that more companies are migrating from traditional
pensions to 401(k) and other defined-contribution plans, almost $22 trillion
remains U.S. corporate pension plans. Some of it is getting lost, and thousands
of retirees, like Wright, aren't reaping the benefits they deserve.
A lot of situations are close
parallels to Wright's, in which companies promised employees a pension, and
then were bought, sold, folded or declared bankruptcy. When this happens, and the
employer terminates the plan, the company is supposed to report this to the
Pension Benefit Guaranty Corp. (PBGC), a federal agency that maintains a
registry of those eligible for pensions.
The last time the PBGC issued a
statement on this subject in 2012, it had $300 million of unclaimed pensions.
That might be just a fraction of what was never reported. According to the PBGC
in an earlier statement, "Individual benefits range from $1 up to $611,028
and average about $4,950."
Don't expect the cash-strapped
PBGC to help collect this money. In May, it said it was running out of funds
and could itself be on the verge of bankruptcy.
But help is out there, said the
PRC's Leavelle. Her group and the Pension Counseling and Information Program
have developed resources to help people like Wright locate lost benefits in
pension and defined-contribution plans. Begin by going on the Pension Help America website,
part of the U.S. Administration on Aging. Fill out the questionnaire, and
you'll be directed to a pension counseling and information project.
But here's the catch: Only 30
states have this limited grant. If you reside in one of the other 20 states,
you'll have to do some investigating on your own.
Search your memory. Did any
company you ever worked for have a pension plan? If so, how long do you recall
working for that employer? You probably didn't qualify for a pension if it was
less than one year. More than five years? You could be entitled. If you worked
there for 10 years, then search whatever records you've retained.
You should have kept most of the
documents you received from your company, said Leavelle. Unlike tax records,
don't shred them after seven years. Theoretically, your company should notify
you of your pension status each year, but "government requirements are
minimal," she said. And most companies -- even those that have stayed in
business for 30 years -- don't go above and beyond for ex-employees.
"Be sure to check in with
human resources before you leave a company, and if you move to a new address,
make sure they have your current contact information," she said.
"Remember, it's all in the paperwork."
If you don't have your former employer's
address, do a web search to find out what happened to the company. Then pick up
the phone and hope someone else kept records.
Here are some helpful sources:
Pension Counseling and
Information Program: Provides free legal assistance to those who need help
with issues related to their retirement plans. While it serves residents of
only 30 states, it can often guide those in the 20 others to helpful resources.
PRC Fact Sheet:
Outlines the ways in which those entitled to a benefit from a retirement plan
can ensure they claim that benefit at the proper time.
PRC Resource: Provides links to
online resources to help employees during all phases of their careers. The
section on switching jobs or retiring helps those unsure about how to find a
retirement benefit from a previous employer.
PBGC booklet: Offers an overview on
lost retirement benefits and guides you through the process of locating a lost
Danny Jo Wright is one of the
lucky ones. He was able to find an effective pension counselor, Robin Price of
the South Central Pension Rights Project in St. Louis, Missouri. She endured
many conference calls and waged war for him with various human resource
staffers. Finally, this spring he learned that a German company that was the
ultimate owner of the unit he had worked for, and it agreed to pay his pension
of $780 a month.
"It's a nice deal,"
said Wright. "But then again, I earned it!"
here for the original article from CBS Moneywatch.