Can a retirement and pension plan become part of a new plan and buy me out?
The company I worked for shut down a facility in my town last November. I am/was a vested member of the Andersen Corporation Employees Pension and Retirement Plan and they say they have become part of the Morgan Pension Plan. I am 52 and at age 65 I was suppose to receive $210.57 a month for all my years of service. They say I am now required to take a full distribution of $1069.33! I don't understand how my whole plan is only worth about five months pay.
Joe2012-01-14T15:12:30Z
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It sounds like they are changing your Plan from a Defined Benefit Plan (monthly payments) to a Defined Contribution Plan (a separate account balance for you). The reason the amount is so low is because an Actuary has calculated that in order to pay you the $210.57 per month, $1,069.33 invested now will grow to an amount necessary to provide you with the $210.57 at age 65. It is bull, but there is very little you can do about it in my opinion. I am a pension plan administrator and have seen this happen countless times. If they are careful it is legal. You could write to the Plan Administrator and ask to be sent a copy of the calculation. Be sure to send it certified return. I suggest you have someone help you write the letter, not because you cannot, but because they are experts at taking your letter and answering only the the unimportant part of the questions. There are many class action lawsuits filed by employees such as you every year. Seldom do they win. When they do it is usually because the company is so arrogant they ignored the requirements of the Employee Retirement Income Security Act (ERISA). I would suggest that if forced to take the amount, you roll it into a good IRA with low expenses. That may not be possible because of the low amount. Your new employer wants out from under the unfunded liability of your pension plan and this is a legal way for them to escape their responsibility, in my opinion.
Excellent question. I was told the opposite when a company I worked for got bought out. I was age 56. We became vested even though I had only been there 1-1/2 years. They said I would get a lump sum $5000. But then they changed it to $145 for life at age 65. Of course a better deal. You need to get that clarified. Was anything in writing?
Because that is all You personally contributed to the fund. Suggest you talk to someone at the State Banking Commission. You can find a contact Name and info at your state website. Many bought out companies are being used just to raid the pension plans and live people like you with nothing. Protect your rights.