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Category: General

Taken a Pension Lump Sum Recently? Getting Ready to Do so Soon? If so, This Article Is a Must Read for You

Taken a Pension Lump Sum Recently? Getting Ready to Do so Soon? If so, This Article Is a Must Read for You

In the pension world, there are two basic types of pension plans: (1) defined contribution (DC) (e.g., 401k) which establish an account for each participant, provide a benefit based on the investment performance of assets allocated to the account, and pay the benefit in a lump sum form (i.e., the account balance), and (2) defined benefit (DB) which provide a benefit based on a formula defined in the plan, but typically provide only annuity benefits, although some DB plans DO…

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Follow Your Pension Plan’s Pension Beneficiary Instructions; Otherwise THIS Unfortunate Result Could Happen

Follow Your Pension Plan’s Pension Beneficiary Instructions; Otherwise THIS Unfortunate Result Could Happen

A recent Court of Appeals case highlights the importance of carefully following the beneficiary instructions in your 401(k) plan. Gelschus v. Hogen, No. 21-3453, (8th Cir. Aug. 29, 2022). Here’s what happened in that case. business people fighting over some us money Sally Hogen was a participant in Honeywell International Inc.’s 401(k) plan. She originally designated her husband Clifford as the sole beneficiary of her 401(k) account in the event of her death. But Sally and Clifford divorced in 2002,…

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Court of Appeals Hands Victory to Plaintiffs in Lawsuit Alleging Detroit Edison Company Misled Them Into Transferring to Volatile Cash Balance Plan

Court of Appeals Hands Victory to Plaintiffs in Lawsuit Alleging Detroit Edison Company Misled Them Into Transferring to Volatile Cash Balance Plan

On March 23, 2021, the Sixth Circuit Court of Appeals issued a major victory to pension plaintiff Leslie Nolan in her putative class action against The Detroit Edison Company (DTE), ruling that she plausibly alleged in her complaint that DTE misled her and other employees into transferring out of its “traditional” pension plan (TP) and into a new cash balance pension plan (CBP) without disclosing, among other things, that if interest rates fell there was a risk they would earn…

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Fascinating Longevity Calculator Estimates Your Life Expectancy

Fascinating Longevity Calculator Estimates Your Life Expectancy

We are often told to save for retirement and, to determine how much money we will need to retire comfortably, estimate our retirement expenditures. However, any estimate of retirement expenditures must take into account our anticipated life expectancy–something that varies from individual-to-individual, depending on our genes, diet, lifestyle, and attitude. To take some of the guesswork out of estimating one’s life expectancy, Dr. Thomas Perls, a leading expert on longevity and aging at the University of Boston School of Medicine,…

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Just How Accurate Is Your Social Security Benefit Estimate?

Just How Accurate Is Your Social Security Benefit Estimate?

Each year the Social Security Administration (SSA) mails about 15 million benefit estimate Statements to persons age 60 or older who are not receiving Social Security benefits and do not have an online Social Security account. The Statement is also available online to individuals age 18 or older. Among other things, the Statement provides workers with their earnings record and a personalized estimate of their future Social Security retirement benefits. But just how accurate are those benefit estimates? A recent…

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Million Dollar Pension Dispute Highlights Importance of Designating a Beneficiary

Million Dollar Pension Dispute Highlights Importance of Designating a Beneficiary

When a vested pension plan participant dies without having named a beneficiary, there is bound to be litigation as to who is entitled to the participant’s pension benefits. Kinder Morgan, Inc. v Crout, No. 19-20037 (5th Cir. May 18, 2020) is just such a case. In Kinder, Danny Lee Crout was an employee of Kinder Morgan Inc. and participated in its retirement Savings Plan until his death in 2016. As of his passing, Danny’s account balance under the Plan totaled…

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Employers Must INDEFINITELY Maintain Records Sufficient to Determine Their Employees’ Pension Eligibility

Employers Must INDEFINITELY Maintain Records Sufficient to Determine Their Employees’ Pension Eligibility

I cannot tell you how many times over the years pension plan participants have called me to complain that their employer or pension plan administrator has told them they cannot find documents needed to determine whether they are eligible for a pension and, if so, the amount. That is ridiculous! Under §209 of the Employee Retirement Income Security Act (ERISA), employers must maintain records with respect to each of their employees sufficient to determine any benefits which are, or may…

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Beware Before You Sign a Separation Agreement: It Could Impact Your Pension Benefits

Beware Before You Sign a Separation Agreement: It Could Impact Your Pension Benefits

In conjunction with an employee’s separation of employment, employers frequently ask the employee to sign a separation agreement in exchange for a sum of money, assistance in finding another job, or some other consideration. For many employees, the lure of the money motivates them to sign the separation agreement. However, most separation agreements include a broad release of claims against the employer and its agents, affiliates, representatives, employees and other related individuals and entities. If you later discover that your…

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Commit a Crime? Risk Having Your Retirement Account Garnished

Commit a Crime? Risk Having Your Retirement Account Garnished

If you are in a private-sector pension plan covered by the Employee Retirement Income Security Act (ERISA), you may have been told that your pension benefits cannot be “alienated.” That is, creditors cannot touch your employer-provided pension or retirement funds while those funds are in the plan. However, ERISA’s anti-alienation rule only goes so far, as one criminal recently learned. United States v. Frank, No. 1:17-cr-114 (E.D. Va. May 6, 2020). In 2017, Lawrence Frank pled guilty to one count…

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Oh Where Oh Where Is My Pension?

Oh Where Oh Where Is My Pension?

It just might be in a state “unclaimed” property fund. A recent research paper issued by the Center for Financial Security of the University of Wisconsin-Madison puts a spotlight on these funds and the many unclaimed retirement accounts in them: “Frictions in Saving and Claiming: An Analysis of Unclaimed Retirement Accounts” by Corina Mommaerts and Anita Mukherjee. In the paper, the authors use data collected from state unclaimed property databases to estimate that nationally in 2016 there were 70,000 unclaimed…

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