How to trace a pension from a company that went out of business
A company going under does not take your pension with it. That is the first thing to understand, because most people assume the opposite and never look.
Traditional pensions, the kind that pay a monthly amount for life, are insured by a federal agency called the Pension Benefit Guaranty Corporation. When an employer with one of those plans fails, the PBGC generally takes the plan over and pays the benefits, up to limits set in law.
They are currently holding money for tens of thousands of people they cannot find.
Start with the free search
The PBGC runs an unclaimed pensions search on pbgc.gov. Put in your name and the name of the company. It is free, it takes two minutes, and there is no reason not to do it even if you are fairly sure there is nothing.
If your former employer's plan was taken over, you can also search by company name and see the plan listed directly.
Two things to know before you decide the search proved nothing. Companies change names, merge, and get bought, and the plan is filed under whatever the legal entity was called, which may be nothing like the name on your old uniform. Try every version you can think of, including the parent company.
And the PBGC only covers defined benefit pensions. If what you had was a 401k, that is a different route, and I will come to it.
When the search finds nothing
Go looking for the plan's own paperwork.
The Department of Labor holds Form 5500 filings, which every private pension plan has to submit annually. They are public and searchable at efast.dol.gov. Find the last filing for your employer's plan and it will name the plan administrator and the trustee at that time. That is your next phone call.
The Labor Department also runs an abandoned plan programme for plans left behind when a company simply vanished without a proper termination, and there is now a federal retirement savings lost and found intended to make this easier. Both are worth a look.
If you have any old paperwork at all, dig it out. A summary plan description, an annual statement, even a benefits booklet from your induction. It will have the plan name and often a plan number, and those two things turn a vague enquiry into a specific one.
401k accounts are different
A 401k is your money in an account with your name on it, not a promise from the employer, so it does not disappear when the company does.
Small balances are often rolled into an individual retirement account in your name without much fanfare. Larger ones may still be sitting with the old recordkeeper. Try the national registry of unclaimed retirement benefits, and try your state's unclaimed property office, because abandoned accounts frequently end up escheated to the state.
Search every state you have lived in, not just the current one.
What the PBGC actually pays
It pays the benefit the plan promised, up to a maximum set by law that varies with your age when payments start. Most people under the cap receive the full amount they were owed.
Higher earners with large promised pensions can be cut, sometimes significantly. Supplements and early retirement sweeteners that a company added shortly before failing are often not covered at all. If your plan was generous and you were senior, expect less than the letter from 1998 said.
That is worth knowing before you build a budget around a number you remember.
Being realistic about the effort
This can take months. I went through it on behalf of a neighbour whose employer, a machine shop, closed in 1994, and it took the better part of a year and eleven phone calls, most of which ended with someone promising to ring back.
The thing that finally worked was an old statement she found in a folder with her mortgage papers. One document with a plan number on it.
So before you start, spend an evening going through whatever paper you have kept. It is more valuable than any search tool.
And if the amount turns out to be forty dollars a month, claim it anyway. Forty dollars a month is nearly five hundred a year, and it is yours. You worked for it.
