Ten Common Causes of Errors in Pension Calculation
- All relevant compensation, such as commissions, overtime, and bonuses, (if these were to be included in your plan) was not included in calculating your benefits.
- The calculation was not based on all your years of service with the company, or all work within different divisions.
- The plan administrator used an incorrect benefit formula, such as wrong interest rate.
- Plan used wrong social security data in calculating your benefits.
- Basic information such as birthdate, and, or social security number was incorrect.
- Your company merged with another company, or went out of business, and there is confusion over which pension benefits you qualify for.
- Assets in your account were improperly valued.
- Your employer failed to make required contributions on your behalf.
- Basic mistakes were made in the mathematical calculations.
- You failed to update your personnel office with changes (marriage, divorce, death of spouse) that may affect your benefits.
Consumer Tips For Safeguarding Your Pension
- Know your pension plan. Obtain and review your Summary Plan Description (SPD), the rulebook for your pension.
- Review your individual benefit statement and individual account information. Know what your accrued and vested benefits are.
- Maintain a pension file. Keep records of where you've worked, dates you've worked there, your salary and any plan documents or benefit statements you've received.
- Notify your plan administrator of any changes that may affect your benefit payments (i.e., marriage, divorce, death of a spouse).
- Know the person in your company who has information about your pension plan and can give you plan documents.
- Know how the merger or acquisition of your company will affect your pension benefit.
- Know your pension rights. Request information on your pension rights and how to protect your pension. Call 1-800-998-7542 for publications.
- Contact the Department of Labor's Pension and Welfare Benefits Administration if you have any additional questions about your rights under the law.
A new guide to help employers, plan administrators, family law practitioners, participants and beneficiaries divide pension benefits was unveiled today by Secretary of Labor Alexis M. Herman at a roundtable discussion in Chicago."Family breakups are difficult enough without having to worry about retirement security," said Herman. "One of my top priorities is to assure that working Americans are economically secure when they retire, and I want families to know they can get help with one of their most important assets--a pension."
The guide, QDROs: The Division of Pensions through Qualified Domestic Relations Orders, clarifies the rules that apply when married couples facing a divorce wish to divide pension benefits or when a domestic relations court determines that support of a dependent should come from a parent's pension benefit. The guide interprets the requirements of the Employee Retirement Income Security Act of 1974 (ERISA), the federal pension law.
First, what is a Book Reserve Plan? In easy terms, it is a retirement arrangement that is funded through allocations on a company's balance sheet. It is not a "pay-as-you-go" plan which is a retirement arrangement that is not funded.More of the article here.It is also not externally funded. The sponsoring company maintains control of the assets behind the liabilities.
Although not a required feature of Book Reserve plans, the assets are usually not segregated; the typical book reserve plan can not look at a particular group of assets as being "owned" by the plan. However, the plan sponsor could, if permitted by corporate powers, set up a segregated pool of assets. But, as with the ideal situation with all Defined Benefit plans, surplus assets (assets greater than the current liabilities to the employees) belong to the sponsor.
In Japan, the plan sponsor gets a tax deduction for accruals to his book reserve liability. Since these deductions represent deductions for amounts not actually spent they do represent substantial value to the sponsor.
Life Planning for Women is the distribution site for the National Center for Women and Retirement Research (NCWRR) at Southampton College of Long Island University.We provide women of all ages with educational materials on every aspect of pre-retirement planning. NCWRR is America's #1 University-Based life planning center for women.
The mission of both Life Planning for Women and NCWRR is to disseminate information and educational materials that will help women achieve financial security. Our innovative work has been showcased on Good Morning America, The Today Show, and appeared in hundreds of magazines and newspapers. By visiting this site you will understand why our information has been heralded as a "survival kit for women" entering the 21st century.
This page was written to answer common questions from managers, rank-and-file ESOP participants in ESOP companies, and others about when and how ESOP participants are paid out. (The discussion assumes that the reader knows what an ESOP is and what employee ownership is; for basic background information, read our overview of employee ownership). Note that the rules below are the legal minimums required by law; your company's ESOP plan may be written to be more generous than the minimum required.
Converting traditional public pension plans to the defined contribution model is suddenly a hot issue. Labor and conservative legislators are squaring off, with many billions in pension assets at stake.
Pensions are crucial to a secure retirement for most Americans. Yet few retirees or their survivors understand the intricacies of pensions. When their retirement security is threatened and people realize that they are not getting the benefits they are entitled to, help can be hard to find. People often do not know where to turn, and for many, there is no place to get effective help.For two days in January 1997, some 85 people representing 35 agencies and organizations came together from all over the country for a first-ever Pension Assistance Summit. The purpose of the meeting was to identify gaps in pension assistance and pinpoint practical solutions to filling those gaps. Convened at the Mayflower Hotel in Washington, DC, by the Pension Rights Center, the Summit reflected a growing recognition among public and private assistance providers that it is time to work together to solve this critical problem.
Key officials from the U.S. Department of Labor, the Administration on Aging, the White House, the Internal Revenue Service, and the Pension Benefit Guaranty Corporation, as well as industry organizations, professional associations, senior groups, and Administration on Aging-funded pension counseling demonstration projects, attended. The Retirement Research Foundation, the Department of Labor, and the Pension Benefit Guaranty Corporation provided funding for the Summit, and four federal agencies served as co-sponsors. The American Council of Life Insurance, the Institute of Electrical and Electronics Engineers, Inc., and the American Society of Pension Actuaries provided additional support.
The Summit reached a consensus on priorities for short-term measures to improve pension assistance using available resources, and initiated steps to implement its recommendations.