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Tracking down an old 401(k) account or
getting a former employer to cough up your beneficiary benefits can be tough. But,
with a little persistence and ingenuity you can get the benefits that are rightfully
yours.
Even a small balance is worth hunting down. A
few thousand invested in a 401(k) plan a decade ago may be a tidy sum today.
When Roxie Ferguson's husband died 11 years ago at age 37,
she knew that, as an investment banker, he had carefully prepared for retirement by
contributing to retirement plans at his various jobs.
After his death, Ferguson waited for his former employers
to contact her and help her collect his benefits. The calls never came. When she went
after the benefits herself, she had trouble convincing the former employers of her rights
and property. More than a decade later, she's still having trouble convincing one company
to release the money her husband contributed to the 401(k) plan.
The problem is that Ferguson threw away records of her late
husband's participation in the plan without realizing their value. Moreover, the company
was acquired shortly after her husband left, and Ferguson says the current owner told her
it can't find her husband's records because they were lost during the transition.
Ferguson's problem of trying to obtain misplaced or
forgotten 401(k) money is increasingly likely in a society where workers may have many
employers prior to retirement. A similar challenge may exist for the spouse or other
beneficiaries of a deceased worker.
Typically, someone looking for this money faces two
challenges: Finding a lost plan and proving participation in it. Both may require a bit of
sleuthing and determination.
Ferguson shouldn't give up hope, pension rights counselors
say. Here are the suggestions we gave her that might help you, as a former employee or as
a named beneficiary, find misplaced 401(k) money.
Money Still There
Today, employers are often as mobile as employees are.
Firms move. They merge with others. They declare bankruptcy. Sometimes they just close
their doors and are never heard from again.
It can be hard to track down an old employer in order to
get your deserved retirement benefits. Often, "... you're left with the best that
your common sense can provide you," said John Hotz, deputy director, Pension Rights
Center,
Washington, D.C.
The trouble is "there's no overall clearinghouse for
401(k)s," said Judi Apfel, staff attorney and project coordinator with the California
Pension Rights Project.
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"There's no overall clearinghouse
for
401(k)s."
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| — Judi Apfel,
staff attorney and project coordinator with the California Pension Rights Project. |
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Regardless of what happened to your former employer, in all
likelihood your money is still there, experts say. In every 401(k) plan, your
contributions, vested employer matching contributions and earnings are held in a custodial
account in your name (or the name of the person who made you a beneficiary). That means
the benefits are separate from the assets of the company and therefore protected in the
event that your company is sold, closes or declares bankruptcy. The only way to remove the
money from the account is on your direct order or by your beneficiary after your death.
Finding a Lost Plan
Before you can get at the retirement money, you need to get
in touch with the plan and make a claim. If you've lost touch with a former plan, here are
some suggestions on how to find it.
Is the employer still there? If so, make a claim.
Send a letter to the benefits department explaining that you are making a claim on the
plan. Include your Social Security number, date of birth and dates of employment.
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Has the employer moved? If so, you need to find out
where. Get an annual report for the company. That will have the corporate address to
contact the benefits department. If the company wasn't publicly traded, check with your
local chamber of commerce. Folks there might know where the firm moved.
Was the employer acquired? If so, you need to
determine if the plan is still operating. Some employers will maintain the plan of an
acquired company, some won't. Ask the acquiring company for a copy of the current summary
plan description or summary of material modifications. Either should show whether the
acquired company's plan is still operating. If it is, you need to file a claim with the
plan administrator.
If your former employer's plan is not still operating, you
need to find the current trustee (the person or company that took responsibility for the
plan's assets) and make a claim. The acquiring company may offer leads to help you find
the trustee. A copy of the old plan's most recent summary plan description could also help
you track down the trustee. If the acquiring company can't provide it, the Department of
Labor's (DOL) Pension and Welfare Benefits Administration (PWBA) can provide, for a fee, a
copy.
Also, some plans formally file a notice of termination with
the IRS. This notice may have leads to help you contact the trustee overseeing the plan
dissolution.
Did the employer declare bankruptcy and/or shut its
doors? If the employer declared bankruptcy, regardless of whether it closed its doors
or is still operating, the money is still there.
"A declared bankruptcy doesn't mean the (retirement)
plan went bad," Apfel said.
If the company is still operating, contact it and make a
claim with the benefits department. If the employer ceased operating after declaring
bankruptcy, the bankruptcy judge will have appointed a trustee to distribute the
retirement benefits. The court documents should lead you to the trustee.
If the company just shuttered its doors, try contacting
your state's secretary of state office, says a spokesman with the New York Pension Rights
Center. He said a corporation often files with this office when it is dissolved. You will
likely have to contact the corporation's attorneys for leads to the 401(k) plan trustees.
Don't have any clue? Try to find former co-workers
— they may be receiving retirement benefits and have contact information for the plan
trustees. Similarly, if the company employed union workers, the union may have information
on retirement plan trustees.
Additional Ideas
These suggestions don't fall into any easily defined
category but are also worth considering.
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| Stay in Touch |
| The easiest way to keep track of your
retirement benefits is to take the initiative. Every time you move, send a change of
address notification to your former plan administrator. Even if the employer acknowledges your participation, it's a good idea to keep
copies of your 401(k) plan statements and pay stubs showing contributions. Your IRS W-2
Form will also show contributions to a 401(k) plan.
Alternatively, you could take your money and roll it into
an IRA. That way you control it and it can't get lost. |
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If you are receiving pension benefits from an employer, the
pension plan administrator may be able to provide some leads to the 401(k) plan.
You can also request from the IRS or DOL a copy of the
plan's 5500, the 401(k) plan annual report required to be filed by law. This document
could provide leads to the plan and plan trustees. Small employers offering SIMPLE 401(k),
SIMPLE IRA and SEP plans aren't required to file a Form 5500. An employer offering a Keogh
plan is, however.
Proving Your Claim
In some situations, like Ferguson's, you may have to prove
employment and/or your right to the money. This situation is somewhat common for the
widows of older male workers. Typically the husbands handled all the household finances.
When they die, sometimes their spouses are left with few clues.
In 401(k) plans, by law, a spouse is automatically the
primary beneficiary of the account. A spouse must sign a waiver to give up these rights.
Here are a few suggestions to help you prove your rights to retirement money.
Build a paper trail. Try to find any old documents,
including old statements, copies of the plan enrollment form, pay stubs, benefits
statements, tax returns or W-2 Forms that will show participation in the plan. The W-2
Form will show salary deferrals to a 401(k) plan.
Further, look for an exit letter describing your assets in
the plan (or the employee's assets, if you're making the claim as a beneficiary). Even an
old business card could be helpful, Hotz said.
Recreate a paper trail. If you can't find any of the
above information, you may have to recreate it. It's not hard, but it takes a little work.
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Often in tracking down a lost plan
"... you're left with the best that your common sense can provide you."
|
| — John Hotz,
deputy director, Pension Rights Center, Washington, D.C. |
|
If you can't find your old tax returns, contact the IRS to
get copies of them. The IRS is only required to keep returns for 10 years. If you want
older returns, they may not be around.
You may need to prove employment at the company. That can
be done by recreating an earnings history. Go to the local Social Security Administration
office and ask for a Form 7050-F3. With this form you can request an individual's earnings
history. You will need to have the worker's Social Security number. This request does have
a cost, usually less than $50.
This report won't show any salary deferrals to a 401(k)
account. But it may be just the thing to get the human resources department in gear.
With both the Social Security report and old tax returns,
you should be able to make a successful claim.
Put the ball in the employer's court. If you're
unable to recreate a paper trail, Hotz suggests putting the burden on the employer. Put
together a notarized affidavit. Include the dates of participation in the plan and the
date when you or your spouse left employment. If you are a plan beneficiary, also include
the date the employee died. Mention that these facts are presented to the best of your
ability and you would testify to them. Present this affidavit to the benefits department
with the explanation that you are making a claim on your or the deceased's account and
that you expect a response within 90 days.
"That affidavit is evidence," Hotz said, pointing
out that this puts the burden on the employer to show that you or your benefactor was not
a participant in the plan.
Make a pest of yourself. The old saying, "the
squeaky wheel gets the grease" may be an effective way to get a recalcitrant trustee
or human resources office to cooperate, suggests Ted Benna, the creator of the first
401(k) plan. Don't be rude, but be persistent. Keep a diary of your activities and copies
of all paperwork and correspondence with the employer.
To the extreme, Benna suggests threatening to go to the
PWBA, contacting your local congressman or alerting the media. Don't make that an idle
threat, those folks are there to help you.
If the employer is particularly difficult, go to the
personnel office unannounced, tell them your problem and refuse to leave unless you can
get some satisfaction, Benna also suggests.
Hire a lawyer. If all your other avenues fail, you
might want to hire a lawyer. The trouble is that often the amount you are trying to
retrieve isn't enough to interest an attorney, Apfel said. "That's where you have to
hope that the Department of Labor takes an interest," she said. |
