It’s time to retire. So what exactly has become of that pension you earned decades ago and the 401(k)s you left with former employers? The answer may not be as straightforward as you think. Your former employer may have gone through a bankruptcy, merger or spin-off, making it tough to track down your retirement plan. Perhaps an employer transferred its pension liabilities to an insurance company, which now owes you an annuity—but the insurer has lost track of your contact information. And if you left a smaller 401(k) balance with a former employer years ago, it may have been transferred to an IRA without your knowledge or consent.
All of these scenarios are contributing to a growing retirement crisis: Not the one that usually makes headlines about workers who haven’t saved enough but a lesser-known crisis affecting workers who can’t find—or don’t even know about—the benefits they’re owed. Just how big is the problem? More than 25 million workers who left an employer between 2004 and 2013 left at least one retirement account behind, according to the U.S. Government Accountability Office. And the Pension Action Center at the University of Massachusetts Boston estimates that retirees are owed upward of $150 billion in missing pension benefits.
The onus is clearly on workers to keep track of their plans and claim benefits that they’re owed. Some steps are fairly simple: Keep all statements and other communications from your retirement plans, and notify your former employers and plan recordkeepers of any changes in your contact information. Consider consolidating old 401(k)s into a low-cost IRA or your current employer’s plan. Keep all tax returns indefinitely. That’s because plans sometimes claim incorrectly that they’ve already paid out benefits, and your tax returns can prove that you didn’t get a payout. Keep an eye on your former employers, watching for any company relocations, mergers or bankruptcies.
For help tracking down a plan, go to pensionhelp.org to find pension counseling projects funded by the U.S. Administration on Aging. The Pension Benefit Guaranty Corp. also has a list of missing participants, which has been expanded to include terminated 401(k)s and other defined-contribution plans.
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