SSA Letter -Participants wants $$$

[PFranckowiak]

Particiant got a letter from the Social Secuity Administration saying he might have benefits from a plan we have administered since 2002. We have no record of him. The letter states he was reported in 1977. Of course he does not remember being paid anything. Client cannot find records back that far. Bank cannot find records - i.e. they have changed ownership etc.

Participant wants proof he was paid.

Any ideas how to deal with this?

Thanks

Pat

[jpod]

I leave to you how to deal with this individual. But, from a legal perspective, if it got serious and he filed a lawsuit, he would have to provide some minimal evidence that he is owed a benefit. Presumably he has nothing other than the SSA letter, otherwise he would have shown it to you. The plan/employer would respond by displaying all the records they have showing that there is no record of him and that must mean he was paid. If the records which have not been destroyed are good, plan/employer should win the case.

[PensionPro]

According to a DOL agent we spoke with, the burden of proof is on the employer to show they paid the participant. Based on the SSA filing the participant has proof that the plan owed a benefit at a certain point in time. Now it is up to the employer to prove that between the SSA filing and the current claim the benefits were paid. Or at least another Schedule SSA with code D was filed. Just because there are no current benefits due the participant does not mean the participant's benefits were not forfeited by the plan.

That's the perspective of one DOL agent. I have not heard how the courts see it.

[mbozek]

Particiant got a letter from the Social Secuity Administration saying he might have benefits from a plan we have administered since 2002. We have no record of him. The letter states he was reported in 1977. Of course he does not remember being paid anything. Client cannot find records back that far. Bank cannot find records - i.e. they have changed ownership etc.

Participant wants proof he was paid.

Any ideas how to deal with this?

Thanks

Pat

I have been waiting 30 years for this train wreck to happen ever since ERISA required plans to file SSA. It will happen more frequently as boomers who apply for SS benefits will be informed that thay have deferred vested benefits due them from XYZ co that they worked for years ago and has long ago been sliced, diced and disposed of in several mergers. The problem is that no one keeps paper records of accrued benefits or cancelled checks from long ago distributions which were destroyed 6 years after payment under some vague records retention policy drafted by corporate lawyers ignorant of ERISA's long tail for deferred vested benefits and lack of a statute of limitations for requesting payment from a plan after termination of employment. (ERISA allows a plan to delay commencement of benefits until age 65 and many DB plans in the 70s and 80s did not allow cashouts upon termination.)

I also dont think there is a presumption of payment due to a lack of records indicating that the accrued benefit has not been paid. Under that logic there would be no need to keep any record of payment or satisfaction of claims.

As the SSA information of an accrued vested benefit is also required to be filed with the IRS under IRC 6057(a)(2)©, why isnt it proof of a valid claim for vested benefits due under ERISA, since the plan administrator was required to file the statement with the plan participant upon termination from employment under IRC 6057(e)? If, at the time of termination the plan provided that the payment of the benefit was deferred until some future early retirement date, say 55 or age 62, the plan has an obligation to produce records showing that the benefit was paid. If the deferred benefit could only be paid as an annuity I dont think there is any way the plan could prove that payment was made prior to the claim by the employee.