How to correct an error on your annual pension statement

Read the annual statement when it comes. All of it, not just the number at the bottom.

That number is calculated from other numbers, and if one of those is wrong, the payment is wrong, and a pension error compounds every month for the rest of your life. A mistake of thirty dollars a month is over ten thousand dollars across twenty-five years.

What to check, in order

Your date of birth and your Social Security number. Both wrong more often than you would think, both easy to fix, both capable of causing chaos downstream.

Your credited years of service. This is the big one. Count them yourself against your own memory of when you started and finished, and watch for the years around any leave of absence, military service, strike, layoff and recall, or a transfer between divisions of the same company. Those are where service gets dropped.

Your final average salary, or whatever earnings figure your plan uses. Plans differ. Some use the highest three consecutive years, some the last five. Check which one yours uses and then check whether the figure matches what you actually earned in those years, including overtime if the plan counts it. Whether overtime counts is a question worth asking directly, because the answer varies and it moved the number substantially for a lot of people I worked with.

Your vesting status. If it says anything other than fully vested and you worked long enough, stop and ring them.

Your beneficiary. Names spelled correctly, percentages adding to one hundred, and nobody on there who should not be. Old designations survive divorces and remarriages with depressing regularity.

Finding the evidence

You cannot dispute a service record with a feeling. You need paper.

W-2 forms are the strongest thing an ordinary person is likely to have, because they show the employer, the year and the earnings together. Old pay stubs work, particularly the final one of a year with the year to date totals. An offer letter or a termination letter establishes dates.

Your Social Security earnings record, available free at ssa.gov, shows earnings by year and by employer. It will not prove pension service directly, but it proves you were there and roughly what you were paid, and that is usually enough to force a proper look.

For military service, your DD-214. Many plans credit military leave and many participants never claim it.

How to raise it

Ring first, because a small number of these are clerical and get fixed in ten minutes.

If it is not fixed on the call, write. A letter does something a phone call cannot: it creates a dated record that sits in the file.

Keep the letter short and structured. Your name, Social Security number, plan name, participant number. One sentence saying what is wrong. The correct figure as you understand it. A list of the documents you have enclosed. One sentence saying what you want them to do and asking for a written response.

Send copies, never originals. Use certified mail with return receipt. Keep everything.

If they refuse

Every private pension plan is required to have a formal claims and appeals procedure, and the summary plan description has to describe it. Ask for the procedure in writing and follow it exactly, including its deadlines, because skipping a step gives them a reason to dismiss you on process rather than substance.

If the internal appeal fails and you still think you are right, the Employee Benefits Security Administration at the Department of Labor has benefits advisers who will look at it. They are free and they carry weight that an individual does not.

Do not let it run. There are limitation periods, and a plan that has been paying you a wrong amount for eleven years will argue you accepted it.

The one thing I would tell everyone

Keep your records. I know that is dull advice.

But the difference between the people I have watched win these disputes and the people who gave up was never persistence or cleverness. It was one of them had a folder in a filing cabinet with old pay stubs in it, and the other one had cleared out the loft in 2003.