Where's my pension?

About $100 billion is unclaimed by workers who lose sight over the years of their earned benefits

Eileen Ambrose

December 4, 2005

Paul Horowitz has been on a five-year quest, searching for a union pension he was promised decades ago when he worked in New York delicatessens.

He had been a member of a union for more than 19 years when the deli he worked for closed about 1980. He found another job, and the union reminded him to get back in touch when he turned 65 to collect a $100 monthly pension.

Over the years, Horowitz lost track of his union and local, which long ago merged with another. He moved to Baltimore about eight years ago, where he now works as a breakfast cook at the Marriott Waterfront Hotel. "Somewhere down the line they disappeared. I tried to find them. I could never get ahold of them," said Horowitz, who turns 70 this month. "I should have had a pension for five years now."

Many people are in a similar predicament. Workers lose sight of private pensions when they move, or after a former employer closes or is acquired. Paperwork is tossed and memories fade, so workers and retirees may not know what happened to the benefits promised long ago.

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You have to be a bit of a Sherlock Holmes to track down a missing pension. And even when your sleuthing locates a retirement plan, the job might not be done if records are lost and you must reconstruct your employment history. Still, undertaking a little detective work can pay off.

The Pension Benefit Guaranty Corp. holds $63 million in unclaimed pension benefits for about 34,000 individuals whose plan was closed and who couldn't be found.

The usual number of 401(k) plans abandoned each year is 1,650, with a total of 33,000 participants and $868 million in assets, according to the Department of Labor. And an AARP report last year estimated that more than $100 billion remains unclaimed in traditional pensions and defined contribution plans, which include 401(k)s.

"This is a serious problem" that often affects lower-income people, said John Turner, one of the report's authors and a senior policy adviser with AARP. "For them, the money can make a difference in their lives."

And it's not just former employees missing out on benefits. A surviving spouse may be eligible for pension benefits, or an heir of a deceased worker may be the beneficiary of a 401(k) account.

How do you search for a missing pension? Government agencies and pension counselors can help. Many resources are available online. For those who don't use the Internet, which includes the majority of retirees, computer help is often available at a library or senior center.

Be aware that pensions going back before the Employee Retirement Income Security Act of 1974 can be more difficult to trace.

Today, for instance, workers typically become entitled to a pension after five years of service, and they can't lose benefits they earned if they leave the job before retirement, pension experts said.

Before ERISA, pension rules were all over the map and not always worker-friendly. For instance, workers might have to log 10 years or so of service before being entitled to a pension.

And they sometimes could lose those benefits if they switched employers before retirement, said John Hotz, deputy director of the Pension Rights Center in Washington.

So someone with a pre-ERISA pension might not be vested - entitled to a pension benefit - even if they worked years at a company, he said. Start your investigation by looking at home for any statements and other pension paperwork, which can yield valuable clues to a plan's whereabouts, such as the name and phone number of the administrator. Without such documentation, the trail gets colder, but not hopeless.

Here are other sources:

The Pension Benefit Guaranty Corp. is the place to go if your company went out of business. Bankrupt companies often terminate their plans and the PBGC becomes the trustee.

Even a company in good financial health might decide to close its pension plan. The employer must undertake a search for plan participants and pay their full benefits, either in a lump sum or an annuity.

Sometimes former workers can't be found, and their benefit ends up with the PBGC.

To search for a plan online, go to the "workers and retirees" section at www.pbgc.gov. You can search for a plan under the company's name, your name or review a list of participants by state, said spokesman Gary Pastorius. If your search is successful or you need help, contact the agency at 800-400-7242.