They sold me to another company and do not want to start pension payme

[Guest hbg]

Company A sold off a segment of the company to company B. All employees of the sold off segment were automatically employed by company B. Being pension eligible under company A's pension plan, I requested that payment start. I was now working for company B. I was told the pension plan had been "transferred" to company B and I would have to wait until I retired from company B to start collecting the pension due me for the time I worked for both company A and B. They said that was the terms of the sale. Can they do this?

[rcline46]

The right to receive a benefit at a particular age is protected under 411(d)(6). However, if the right is an early retirement right, one must actually retire to receive the benefit. We would need much greater detail on the Company A plan and how the plan was 'transferred' to Company B - spin-off, transfer of assets and liabilities and so forth. This could be a difficult discovery, but maybe worthwhile.

[david rigby]

I agree with rcline46. But if the plan was actually "transferred", then A or B or both should be doing some formal communication describing that transaction.

[Guest hbg]

rcline46, pax, Thank you for your replies. To clarify two points you have brought up :

1. I was 65 years old, the Plan's stated normal retirement age, when the sale occurred.

2. A Q&A type document was issued that read :

Q. What happens to my Company A pension?

A. Company B has agreed to accept pension trust assests and liabilities (future promise to pay pension annuity benefits accrued under your pension plan at Company A) associated with the pension benefits you have earned from your service to date. What that means to you is that all benefits you have accrued by the time of the sale will transfer to Company B.

Under federal law Company B cannot take away or reduce your pension benefit that you have already accrued. Your prior service under Company A plans will count under the Company B's plan. If you were vested under the Company Aplan, you will be vested in the Company B's plan. If you were partially vested under the Company A plan, you will need to continue service with Company B to become fully vested.

I was fully vested under Company A and I want to start collecting my pension earned under Company A. I will start building a second pension under Company B's plan (the same as Company A, we've been told) starting with the sale date.

Thanks, again.

[rcline46]

It is likely that the terms of the plan require you to actually stop working to collect your pension. You are no longer in A's pension plan so you cannot collect from there.

You need to check the details of A's plan to see if you could collect a pension AND continue working. Generally this is known as an IN SERVICE DISTRIBUTION. Not many defined benefit plans have this feature.

[david rigby]

To followup on rcline46's comments, most plans (especially defined benefit plans) require any participant to sever employment to receive a benefit. This typically includes death, disability, retirement, or other termination of employment. Some plans, but by no means a majority, permit an employee to receive benefits at Normal Retirement (defined in the plan, but ususally 65) while still employed. If A's plan had this provision, it cannot be removed by transferring to B.