by Carol A. Fichtelman¹

Representing a claimant who has a pension plan with a past employer presents many challenges. As the former director and managing attorney of the OWL Pension Benefits Project,² I assisted individuals (usually age 65 and older and already receiving Social Security benefits) claiming pension benefits from a previous employer. Most of these retirement benefits were from defined benefit plans. Many of these companies had gone out of business, left the area, or merged with another entity. Moreover, many claimants did not keep documents evidencing past employment or participation in a pension plan.

This article addresses the particular problems and issues faced when filing a claim for a pension benefit from past employment on behalf of a former employee or his/her surviving spouse. After a cursory discussion of the claims process, the article will focus on how to track down a lost pension. Finally, the last section will discuss what happens when proof of employment becomes an issue during the claims process. Although an administrative appeal and federal lawsuit can follow a denial of a pension claim, those two areas are not within the scope of this article.

II. Pension Benefit Claims Process

Defined benefit plans existed well before Congress passed ERISA, formally known as the Employee Retirement Income Security Act of 1974.³ Many companies and unions involved in construction, transportation/trucking and the garment industries had established defined benefit plans for their workers by the time ERISA was enacted. This act protects pension benefits by: (1) guaranteeing a pension became vested after a set number of years; (2) establishing a claim procedure with an administrative appeals process; (3) insuring pensions in case of a bankrupt company or underfunded plan; and (4) stipulating age 65 as normal retirement age.

So what happens if Jane Jones, age 67 and receiving Social Security retirement benefits, wants to know if she is vested in a pension benefit from QRST Company, where she worked from 1976 to 1986? First, the fact that she is past the ERISA retirement age does not preclude her filing a claim for benefits. Second, the fact she worked for this company several decades ago also does not bar her from filing a claim. ERISA has no time limitation on when a claimant has to file for a retirement or a survivor benefit.

Finding out if a claimant has retained any documents is very important. Records evidencing employment history include: W-2s; Form 1099; pay stubs; or union card. Also, plan documents showing participation in a pension plan are invaluable, such as: (1) summary plan description; (2) actual pension plan document; (3) benefit estimate statement; or (4) letter/memo from the plan administrator.⁴ However, lack of supporting records is not a bar to filing a claim for benefits. Most of the project's claimants had no work or plan records; they either threw out important documents or lost records due to a fire or multiple moves. The project, however, still obtained pension benefits for those who were qualified, even after 20 years or more had elapsed.

The next step, assuming the location of the company and pension fund is not a problem, is to send a written claim letter.⁵ Making an initial inquiry or claim by phone is not beneficial.⁶ Furthermore, the company or pension fund is unlikely to release information without the claimant's signed release. Other points to bear in mind include:

• Sending the claim letter certified mail, return receipt requested;

• Addressing the claim to the pension plan administrator;

• Providing the claimant's Social Security number and date of birth;

• Stating the years of employment, location of facility and job(s); and

• Requesting pension plan documents.

As this last point makes clear, the claim letter should request pension plan documents.⁷ Even if the claimant has the latest edition of the pension plan, the pension plan in effect when the claimant left employment governs.⁸ Thus, if Jane Jones has the 2000 version of the QRST Pension Plan, the plan in effect in 1986 must be obtained, since that document governs her benefit. Other requested plan documents are: (1) former and current summary plan description;⁹ (2) employment record or pension credit history;¹⁰ (3) collective bargaining agreements;¹¹ (4) benefit estimate and calculations;¹² and (5) benefit application, if so required.

Once the claim letter - including a request for plan documents - is sent, the plan administrator has 90 days to process the claim. An additional 90 days is permitted as long as the plan administrator asks in writing for such an extension.¹³ Thus, conceivably a full six months can elapse before a determination is made. If it is determined the claimant is vested in a pension, the benefit becomes retroactive to the date of application, assuming the claimant has met the age requirement.¹⁴ The plan administrator's determination letter must by law: be in writing; state the specific reason for the determination (i.e., eligible, ineligible, partial benefit); cite the specific plan document sections justifying the determination; and state the information necessary for filing an administrative appeal. The appeal deadline with name and address of the fiduciary responsible for hearing this request for review is also required to be in the determination letter.¹⁵

III. Problem Areas: Locating the Lost Pension

The biggest problem faced by someone claiming a pension benefit from past employment is locating the company or current manager of the pension plan or fund. It is crucial to ask a claimant to provide any records retained regarding past employment, particularly if the company no longer exists. Other important bits of information that can help locate a lost pension are: (1) years worked (e.g., 1976 to 1986); (2) exact name of company; (3) last address of company; (4) claimant's job title; (5) exact description of claimant's work; and (6) any union affiliation.

If Jane Jones, our hypothetical claimant, worked 10 years for QRST Company, and its pension plan required 10 years of service to vest in a benefit, she is vested. What happens if the company has gone out of business, if the pension plan document cannot be located, or if the company goes bankrupt or the pension fund is frozen or underfunded? The following sources of locating a lost pension are listed in order from first priority to last resort.

A. Union Membership

Locating a pension benefit based on union membership is a good place to start. Usually the union sponsors and administers the pension or the employer does. Either way, the collective bargaining agreement (generally negotiated every 3-4 years) between union and employer sets out the terms of employment, including any pension benefit. Thus, contacting the local union's business manager or secretary-treasurer can result in finding out the fiduciary responsible for the pension benefit. But what if the claimant cannot recall the exact name of the union? What if the past employer had on the payroll a mix of union workers with different affiliations as well as non-union office personnel?

Knowing the claimant's specific job duties and title and what the past employer manufactured can allow you to pinpoint union membership, thereby tracing the pension plan. For example, Jane Jones knows that she joined the union when she first started work at QRST Company; however, she can only recall being a member of the AFL-CIO. Furthermore, she threw away her union card. But she knows that QRST made parts for automobiles, buses and railroad cars. She worked on the assembly line and in the warehouse. Last of all, she relates that QRST closed shop in 1988, two years after she was laid off. Based on Jane Jones' information, she probably belonged to one of the following unions: autoworkers; steelworkers; or teamsters.¹⁶ Filing claims with the local union, the regional office, and multi-employer plan, or writing and asking for information from the national headquarters of a union - particularly if it's an employer-administered plan - is the next step in the process.¹⁷

B. Secretary of State and Internet Search

In addition to union membership, another way of tracing a lost company or lost pension plan is to contact the state agency responsible for keeping records of corporate businesses. For companies previously doing business in Missouri, the Missouri Secretary of State's Office is a valuable resource. By phoning the office or searching its website, a claimant's representative can obtain information on a company's registered agent or perhaps forwarding address. Another method is performing an Internet search.¹⁹ Going on the 'net' to find a past employer achieves great results, supplementing data supplied by the Secretary of State records.

Let's say Jane Jones worked for Graham Paper, a company formerly based in St. Louis. She started there in the late 1960s and left in the early 1980s. Furthermore, she relates that the Jim Walters Company bought Graham Paper sometime in the 1980s. An Internet search reveals information that Jim Walters Company sold off its paper products division to another company, which in turn merged with another. Finally, Georgia-Pacific is discovered as the repository for the Graham Paper pension benefits. Its website supplies names and addresses to file a claim for benefits for Jane Jones.²⁰

C. Pension Benefit Guaranty Corporation

The Pension Benefit Guaranty Corporation, located in Washington, D.C., is the quasi-governmental agency responsible for insuring defined benefit plans.²¹ The PBGC has an extensive website listing businesses, alphabetically and by state, with terminated pension plans.²² Just because the agency's site does not contain any information about the claimant's former employer doesn't mean that there are no records. It's possible that the company's pension plan terminated, funds were distributed to retirees and annuities purchased for deferred vested workers.²³ A claimant could be one of these deferred annuitants or be someone who slipped through the woodwork. The PBGC has special procedures to follow up on these woodwork participants.²⁴

D. U.S. Department of Labor and Social Security Administration

Two other sources useful in locating a pension are writing the U.S. Department of Labor²⁵ or the Social Security Administration.²⁶ The Department of Labor is the depository for Form 5500, an IRS form filed by defined benefit plans. This form possesses pertinent information, such as: the exact name of the plan; the name and address of the plan administrator; and the name and address of the actuary. As for the Social Security Administration, this agency contains detailed employment histories (including name, address and tax identification number of employers) of all workers employed by companies contributing to this retirement system. SSA charges for these records based on the number of years required.

IV. Proving Employment History

Once the pension plan or fund has been located, another problem that can arise is proving employment. Even if QRST Company is still in business, Jane Jones may have difficulty claiming a pension benefit due to so many years having elapsed since being employed. During my years at the OWL Pension Benefits Project, plan administrators would write back, stating that no employment records existed for a claimant. At that point, the burden was on the project and the claimant to provide a detailed Social Security earnings record. Even though the plan administrator would state that reimbursement would follow if the claimant became vested, this state of affairs put a financial burden on claimants, who could ill-afford the cost.

Before January of 2002, pension plan administrators could require a claimant to provide records showing employment when company employment records could not be located. But often old personnel or employment records remained in storage (and sometimes had been destroyed) and were never entered into a company's computer database. So when Jane Jones was told that there were no records of her employment at QRST Company from 1976 to 1986, it meant that Ms. Jones' employment records were not in the computer and that the plan administrator was not going to check elsewhere. Jane Jones would not be allowed to pursue her claim, since she was not a former employee and, therefore, could not be a pension plan participant. Quite clearly, this maneuver squarely put the burden and cost of the claims process on the claimant.

However, new regulations appear to have shifted this burden back onto the plan administrator. As of January 1, 2002, ERISA implemented new regulations²⁷ banning plan administrators from charging a cost or fee for processing a claim for benefits. The effect of the new regulations is that a claimant cannot be forced to obtain and then submit her Social Security earnings record to prove employment. Plan administrators now bear the burden to obtain the Social Security records of a claimant if employment history is not readily available. In fact, even before the new rules went into effect, many pension funds were already obtaining these earning records as a matter of course.²⁸

V. Conclusion

During my tenure at the project, I was able to collect pension plans, summary plan descriptions and collective bargaining agreements from more than 350 company and union plans. Moreover, the project compiled a 56-page address book, locating these lost pensions and the companies or entities responsible for administering the pension plan benefits.

The important lesson to remember here is that lack of records evidencing past employment does not preclude filing a claim for a pension benefit. Also, tracking down a lost pension benefit for a claimant is challenging but very rewarding. I liken it to putting the pieces of a puzzle together. Any attorney who decides to enter this field will achieve emotional as well as intellectual satisfaction.

Footnotes

¹ Ms. Fichtelman received her B.A. at The Ohio State University and her J.D. at the University of Toledo College of Law. She practiced law in Michigan and Washington, D.C. providing legal services to the elderly, then did pro bono work for various aging organizations in Virginia before moving to St. Louis in 1996. In May of 2003, she left her position as director and managing attorney of the OWL Pension Benefits Project to pursue other opportunities.

² The project, based in St. Louis, was funded by the U.S. Administration on Aging and Retirement Research Foundation before I left on April 30, 2003. Services were free of charge.

³ Employee Retirement Income Security Act of 1974, Pub. L. No. 93-406 codified as amended at 29 U.S.C. §§ 1001 et.seq. (2004), is usually cited by its public law sections.

⁴ Some pension funds have a third-party administrator, such as MetLife, servicing the plan.

⁵ See 29 U.S.C. §§ 1025,1133, 1135 (2004); 29 C.F.R. § 2560.503-1 (2003).

⁶ Most project clients had already made phone calls to plan administrators and been rejected over the phone before coming to the project. No written determinations were ever sent until the project intervened.

⁷ 29 U.S.C. §§ 1021-1022 (2004), 29 C.F.R. § 2560.503-1 (2003) allows a claimant, or his representative, to obtain plan documents.

⁸ So even if the pension plan was later changed, or amended, those changes will not affect a claimant's pension benefit.

⁹ Companies are now sending out the SPD electronically or via e-mail. Participants can still request to receive the hard copy by mail. The booklet is just a guideline or roadmap and not the official document governing the pension benefit.

¹⁰ Employment/credit history will show how many hours claimant worked, since hours worked translate into service credit or pension credit. Also, ERISA governs the minimum credits required to vest.

¹¹ The CBA is needed if claimant was a union member regardless if a single employer plan or a multi-employer plan is involved.

¹² Benefit rate and formula are in the official pension plan document.

¹³ 29 C.F.R. § 2560.503-1 (2003).

¹⁴ Thus, if Jane Jones is age 67 when she applies for a pension benefit, the amount of her benefit is calculated from the date of application. The fact that she was eligible to start receiving a pension two years earlier at age of 65, normal retirement age, does not factor into the calculation of the benefit amount.

¹⁵ 29 C.F.R. § 2560.503-1 (2003).

¹⁶ United Auto Workers (UAW) and United Steel Workers of America (USWA) have single-employer plans while International Brotherhood of Teamsters (IBT) has regional multi-employer plans. Central States, Southeast and Southwest Areas Pension Fund is the Teamsters pension fund for the Midwest.

¹⁷ Paying union dues does not mean that a union member was a participant in the pension plan or that his employer contributed on his behalf.

¹⁸ Call 573-751-4936 or input www.sos.mo.gov. Site last visited 4/26/04.

¹⁹ One such search engine is Google at www.google.com. Site last visited at 4/26/04.

²⁰ There are reference sources available to track down businesses, but are of little value unless libraries keep copies dating back decades.

²¹ See 29 U.S.C. §§ 1301 to 1461 (2004); 29 C.F.R. §§ 4000 et seq. (2003).

²² Call 1-800-400-7242 or see www.pbgc.gov. Site last visited on 4/26/04.

²³ A standard termination, as opposed to distress termination, whereby the PBGC is the plan administrator.

²⁴ Write to: Manager, Standard Termination Compliance Division, PBGC, 1200 K Street, NW, Washington, D.C. 20005-4026 or call 1-800-400-7242.

²⁵ Write U.S. Department of Labor, File 5500 Disclosure, Room N5638, 200 Constitution Ave. NW, Washington, D.C. 20210, Attn: Senior Disclosure Clerk.

²⁶ File form SSA-7050-F4, Request for Social Security Earnings Information, at: SSA, Division of Earnings Record Operations, P.O. Box 33003, Baltimore, MD 21290-3003. Form can be obtained from any local Social Security office or by downloading it from www.ssa.gov/online/ssa-7050.pdf. Site last visited 4/26/04.

²⁷ 29 C.F.R. § 2560.503-1 (2003). The Pension & Welfare Benefits Administration of the U.S. Department of Labor has been renamed the Employee Benefits Security Administration. Check out www.dol.gov/ebsa. Site last visited on 10/08/03.

²⁸ The International Ladies' Garment Workers Union (ILGWU), now called UNITE (Union of Needletrades, Industrial & Textile Employees), and Central States Southeast and Southwest Areas Pension Fund (the Teamsters regional plan) are two such examples.