Early Retirement Pension converted to Disability Pension

I am the beneficiary of my late husband's defined pension annuity.  The pension began as an early retirement pension but was converted to a disability pension when he received the SS award letter.  When the pension first started, we elected the 50% husband and wife. Nearly three years later, the plan sent new elections forms.  We  changed the form of payment to 120 certain payments.  The plan is denying my claim for the remaining twenty payments saying they are using the earlier annuity starting date, not the date nearly  3 years later. That was not explained in any of the election notices or correspondence.

Also, he had reached normal retirement age when he passed by three months.

Go here:

https://www.actuary.org/content/pension-assistance-list-pal

Good luck.

You mentioned that your husband was disabled and that his his original benefit was converted to a disability benefit.  

The disability provisions are critical to this discussion and will impact the outcome.

It is possible that the disability benefit was a larger benefit, and therefore, once he qualified for the disability benefit, the benefit was converted, however this may not have changed his earlier election of a 50% survivor annuity as the "retirement" benefit.

For many plans the disability benefits are "ancillary", that is, in addition to the retirement benefits.  If he elected an early retirement benefit, in the form of a 50%  survivor annuity, these "retirement" benefits may have been suspended while the disability benefits were being paid.  Assuming they were higher, this would have been to his advantage.  Disability benefits are generally payable until the earlier of death, or Normal Retirement Age (typically 65).  Upon your husband's death, payments would be converted back to "retirement" payments the the 50% survivor election becomes relevant again.    

I don't know why there would have been a subsequent election - that part of your story doesn't really make sense.  Generally, you cannot change you election once it has been made.  But, although you may want the higher 10CC payment, keep in mind they will stop at the end of the 10 year period.  The 50% of the survivor annuity is a lifetime annuity to you.  Since your husband has died, the lifetime annuity to you is likely much more valuable because it will continue for your lifetime.  

This is all just a guess on my part.   The actual facts could create a completely different scenario.  

Thank you for the link. 

I don’t understand why they sent new election forms either. When the early Retirement Pension began, the 120 certain month option was not available because we had not applied for the pension in the time required for this Plan.

i didn’t realize that at the time that there really should not have been a subsequent election. I asked the plan administrator that question recently. The response was that it was a “new” pension thus new election forms. So why the original date I asked? They would not answer that.

I also understand that my husband did receive a larger pension when it was converted because he was no longer penalized for an early retirement. (55)  That is why he converted it. This makes it seem that it was indeed an auxiliary disability pension as he received the amount that he would have received at NRA. 

The periodic payments were not certain either because they were conditional on his remaining disabled and confirming that he was on a yearly basis. One time the paperwork was not returned when they required and they suspended his benefit.

i would most definitely like to receive the 50% husband and wife as originally chosen.

Any advice is greatly appreciated.

You said he made this election 3 years after his disability benefit started. 

If this 2nd election did not occur within 90 days (or maybe 180 depending on the document) before the commencement of the "retirement" benefits, you may be able to argue that it wasn't a valid election.  

I know it is confusing, but there is a difference between "disability" benefit and "retirement" benefits.  Knowing which your husband was receiving, may be very important.

Can you provide approximate dates?  When did he make his first election, when was the benefit converted to a disability benefit, when did he make his second election, when did the disability benefit stop and the retirement benefit start. 

Also, did you consent to the 10cc election?  When was that benefit scheduled to start?

You will need to gather up as much of the documentation you can get your hands on (distribution election packets, Summary Plan Description, Plan Document, signed election forms, a written history of every check you have received from the plan) and then either hire an expert or have a volunteer from the link I sent assigned.  Good luck.

The early retirement started in October, 2007 when he was 55. This was started even though he had filed for SS disability. It was apparent after treatment for cancer that he was not going back to work. The intent was that the early retirement would be converted to a disability pension when/if it was awarded.

The plan allowed this conversion at the time. Once he received the determination of SS disability, around January 2008, the process was started with the plan to convert it into a disability pension because it was the same amount as his age pension would have been at 65.

The award letter stated his entitlement date was December 2006. The plan sent new election forms with the option of the 120 certain payments which on the original election was not allowed. The plan would not release the makeup payments or start the “new” disability pension until the new election forms were signed by both of us. I did sign the election form on June 16, 2009. My understanding was that the new election form with the “new”  pension would also have a new annuity starting date of August 2009. Since they were so insistent that these forms HAD to be signed prior to releasing the payments. None of the correspondence indicated that it really was a 120 month certain payment minus the makeup payments. I also, at the time, was not aware that a survivor pension was the default option and I was entitled to it by law. 

The option of receiving a higher payment including the makeup payments going forward was never offered either. Since they are using the annuity start date of October 2007 and the 120 certain month option was not available at that time because we had not filed the application for the pension per their guidelines, how can they offer it later, but use the old date?

As far as all the documentation, I have check stubs until it was deposited electronically. The check stubs show the clear distinction between retirement and disability as it is written on the check stub. The date of the first disability check is August 2009. The plan also states that once a participant turns 65, then the pension becomes an age pension. New election forms were not received prior to that date.

I fully endorse everything said above by Mike and Effen.  This discussion forum is not the best place to analyze the details of your situation; there is wide variation among plans that include a disability benefit. 

I urge you to take Mike's advice about enlisting a volunteer to help you.  The program he linked to is sponsored by the American Academy of Actuaries: an experienced pension actuary volunteers to dig in, with you, to analyze the details.  The actuary has probably done similar "detective work" previously and will know the right questions to ask.

It is possible that you have a valid argument, but I agree with Mike & David on this, there is only so much we can do without seeing the actual paperwork and plan documents.  You should request a copy of the plan document and Summary Plan Description from the plan sponsor because whoever you retain to help you will need them.

I would start by contacting the people on the link that Mike provided.

Good luck.  Let us know if they are not helpful.

Thank you. I have all the documents that you suggested. I have been trying to find an ERISA attorney, but so far no one will call me back.

I did click on the link given to me, filling out their form. I will wait for their response.

Thank you for your all the advice.