NEW YORK -- Here's a major financial responsibility that most working people don't know they have: keeping track of their pension credits. At retirement, it's not unusual for a pension check to be wrong.
No one knows how many workers are being shortchanged. Some people lose a few dollars a month, others lose large lump sums.
Mistakes are usually inadvertent -- a result of complicated pension plans and complex, ever-changing laws. Among the many possible errors:
(1) Say you started out in a union plan, then moved up to management. Your union credits might be forgotten.
(2) Say your plan counts bonuses and overtime. They might be left out when your pension is figured.
(3) Say you contribute to a 401(k) plan. An overlooked entry 10 years ago might have grown into a major loss.
(4) Say you switched from one division of a big company to another. You might get the wrong division's plan or lose credits from the previous plan.
(5) Say your pension is based on your five highest earning years. The plan might take your last five years of work, ignoring some higher-paying times.
(6) Say you worked part-time. You might be left out, even though you're generally covered if you work at least 1,000 hours a year.
(7) Say you leave one company for another. Your ex-employer might use the wrong interest rate when figuring your lump-sum payout, which could shortchange you.
(8) Say you're in a multiemployer plan. All your employers might not have reported all the hours you worked.
(9) Say you work beyond normal retirement. Your post-65 benefits may be wrongly calculated.
(10) Say you left the company and then came back. You might be entitled to additional benefits from your previous years.
The big question is, what can you do about it?
Keep good records and check, check, check.
Workers are entitled to annual statements, showing how large your pension has grown. Most larger companies send one automatically (including quarterly statements for 401(k) plans). Otherwise, you have to request them in writing. When you enroll, you get a summary copy of how the plan works. You're also entitled to an annual financial report, telling you about the fund's investments.
If you have a traditional pension, you can use these reports to check every year that all your earnings and hours were counted toward your benefit.
The plan summary, for example, will tell you whether overtime is included. Call the pension office to see if its records agree with yours. The summary also gives you the formula for computing what your benefit should be.
If you have a profit-sharing or 401(k) plan that your employer contributes to, make sure you get credited every year. Some small employers are lax about this, says Mary Ellen Signorille of the American Association of Retired Persons.
Your year-end W-2 form shows whether you were covered by the plan and what you contributed. The W-2 and your benefit statement should agree.
Check the annual financial statement to see how well your profit-sharing plan performed.
If it rose by 10 percent and your account rose by only 5 percent, something is wrong.
Keep all these statements until you retire, including the W-2 forms.
Employers have been known to lose track of some of the years you worked -- especially if the company is sold.
If you think something's wrong, write to the plan administrator, says Gloria Della of the U.S. Department of Labor, which administers pension-plan law. Don't telephone.
"If you haven't asked in writing, you haven't asked," she says. Get the factors that were used to calculate your pension -- the formula, your years of employment, your earnings.
If, for example, your company has the wrong hire date, ask for a correction.
It's harder to make corrections at retirement. One solution, suggested by the AARP: Ask your library for the Enrolled Actuaries Directory of the American Academy of Actuaries and start calling local members, looking for someone who takes individual cases.
For perhaps a few hundred dollars (depending on the situation), an actuary should be able to check your monthly pension payment or lump-sum distribution, if you have all the records. Finding mistakes in 401(k) plans, however, can cost more.
If the actuary says you're being shortchanged, and your employer is unresponsive, write to the American Association of Retired Persons, Worker Equity, 601 E St. N.W., Washington, D.C., 20049, or the Pension Rights Center, 918 16th St., N.W., Suite 704, Washington, D.C., 20006.
They don't endorse lawyers, but can refer you to some who handle individual pension cases.
Jane Bryant Quinn is a syndicated columnist. Write to her at: Newsweek, 444 Madison Ave., 18th Floor, New York, N.Y. 10022.