Pension Wonderland

Imagine you retire and start to receive a pension check from your employer's pension plan. As a careful person, you make your own calculation of your monthly pension and it seems that the pension plan made a mistake. Your pension should be larger. So you send a letter to the plan administrator asking for an explanation of your benefit payment. You send the letter to the address provided in the summary plan description and, to be extra careful, you send it by certified mail. You receive no response. So you send another letter. And another. You make phone calls. Still, no response. You visit the benefits office, only to be told that the benefits administrator left for a meeting, and you are not permitted to look at the pension documents. Five years pass while you work to get an answer to a basic question: How did the plan calculate my benefit? Finally you get your first written response -- from the company's outside legal counsel. He offers an explanation of why your benefit is not as large as you think it should be, but then advises you that it is too late to appeal, too late to go to court, because you failed to challenge the benefit payment five years ago! Sound unreal? Well, it's not, as recounted in this saga of a Motorola retiree.

The retiree finally retained counsel, who a filed a class action. It wasn't too late and the retiree had a right to review the plan documents that supposedly guided the calculation of his pension benefit. The case is now poised for settlement, more than seven years after the retiree first inquired about his benefit calculation.

Tips for Retirees

• Retirees who have a question about their benefit but face an unresponsive pension bureaucracy, may not want to wait five years to consult an attorney. Consider consulting an attorney with ERISA experience early in the process if your pension plan is ignoring your inquiries.

• Consider contacting the local office of the Employee Benefits Security Administration of U.S. Department of Labor. The DOL has responsibility for enforcing ERISA requirements. While the DOL typically does not file lawsuits on behalf of individuals with benefit claims, the EBSA offices have staffers who can contact the plan on your behalf to help obtain the requested documents and an explanation of the benefit payment. A phone call or letter from the DOL may bring more urgency to your inquiry.
  

• If you have received a response to your inquiry about the benefit calculation, and you are not satisfied with the response, you may have to start or continue with the administrative appeals process. If you do not complete the administrative process, or if you wait too long, you may lose your right to pursue your claim. Again, consider consulting with an attorney, if you have not done so previously.