I was terminated from my emploer this past summer due to a plant closure. I was told by HR that my pension plan exceeded $5000 (its valued at $7200), thus, I could not do a lump sum cash out upon termination. I now have to wait until I am 65 to receive $199.85 a month, and I am 36 years old now. This money will not "grow" I could put this money to better use by investing it. This pension was not an employee contribution plan. HR tells me I have no recourse or options in this matter. Is this true? Is there anything at all I can do to get this money?
2006-12-27 02:19:25 · 4 answers · asked by beechjb 2 in Business & Finance ➔ Careers & Employment
Your employer's plan is just like your Social Security benefit. Social Security is a pension plan run by the government. Just like Social Security, your former employer is promising to pay you a monthly benefit for life once you turn 65.
The payout options are largely at the discretion of the employer. They must be part of the written plan document and are in the Summary Plan Description that a plan sponsor is required to provide the employees. What HR told you is likely true but you should check the SPD just in case.
The $5,000 figure is the cut off where the employer can force you to take a lump sum. Over $5,000 your agreeing in writing to the payout is generally required. The $5,000 force out is meant to be a cost saving measure for plan sponsors and is not intended as a benefit to the employees (though many prefer to get the lump sum).
The employer could modify the plan to allow you to take a lump sum but they are not required to do so. Many pension plan sponsors don't allow lump sums because if you die before you turn 65 and are single, the plan may not have to pay you anything at all. And if you are married they probably pay a death benefit reduced by 50% to your spouse.
If the plan does not allow lump sums for balances in excess of $5,000 there is nothing you can do to force them to pay you a lump sum. They are required to follow the terms of their plan. So long as they are doing this and the plan's provisions are legal, you have no legal recourse.
One tangent, if by closing the plant more then 20% of the participants in the plan lost their jobs, then that would be considered a partial termination of the plan and everyone who lost their job should have been made 100% vested.
2006-12-28 06:07:56 · answer #1 · answered by facade 2 · 0⤊ 0⤋
Probably not. Pension plans have very different rules than most contribution plans.
You can request a copy of the rules of you plan to see if their is a loop-hole to pull your money out. Chances are, the money has to stay their. Usually a company will allow you to pull the money out in a lump-sum at age 62 or 65.
2006-12-27 02:23:44 · answer #2 · answered by MR MONEY 3 · 0⤊ 0⤋
It really depends on the company. I was laid off from a company and got my pension. Be careful though because you only get 50-65% of it if I am not mistaken if you are younger than 65.
2016-06-04 05:48:58 · answer #3 · answered by lisa h 2 · 0⤊ 0⤋
how can i get my money
2015-09-21 07:53:33 · answer #4 · answered by Ramona 1 · 0⤊ 0⤋