Question:
Are employers required to provide pensions?
Answer:
No. Many employers offer pension plans because it helps them to recruit
and keep good workers, or because a union bargained for pension benefits.
However, once an employer does offer a pension plan, several federal
laws (passed in 1974 and since) set guidelines for how the plan must
operate.
Question:
Are all pension plans the same?
Answer:
No. Each employer or union writes his or her own plan, subject to federal
pension requirements.
Question:
What basic rights do I have?
Answer:
If you participate in a private plan you have the right to:
- Specific information about the plan, including a Summary Plan Description,
which informs you of the terms of the plan;
- To be paid the benefits you are entitled to; and
- Honest administration of the plan.
Question:
How can I find out the rules that apply to me?
Answer:
Every private pension plan should have a summary plan description (SPD)
that states the rules in plain language. It is supposed to be given
to every worker at the time he or she joins the plan. If you do not
have a copy of the current SPD, you can request one from the plan administrator
of your pension plan.
Question:
How can I find out what benefits I can expect?
Answer:
Many plans automatically provide a yearly statement that tells you two
things: the benefits you have accrued up to now — that is, the benefits
that you would be entitled to even if you retired tomorrow — and the
benefits you can expect if you retire at whatever standard age is specified
in your employer’s plan. If your plan doesn’t provide these statements
routinely, you can request your statement from the administrator of
your plan.
Question:
What is vesting?
Answer:
Vesting is a guarantee that you will receive the benefits you have earned,
regardless of whether you are still working for that particular employer
at the time you retire. Pension plans specify a certain amount of time
(usually five years under current federal law) needed before you become
vested.
Question:
If I am not vested at the time I leave the company, does that mean I
do not get anything, even the pension money that’s been withheld from
my pay?
Answer:
No. You are always entitled to the money that you yourself contributed
to the plan. If you are not vested, however, you won’t be entitled to
the money your employer provides.
Question:
What happens to my pension if my employer goes out of business?
Answer:
If a private employer goes out of business, the company may terminate
the pension plan and purchase annuities. This allows the company to
fulfill its obligations under its pension up to that date, but it no
longer has to administer it or to continue to put more money into it.
The company may also simply hire a different pension plan administrator.
If the company cannot afford to pay out the pension, the Pension Benefit
Guaranty Corporation may take over the plan and pay the benefits, although
there are some limitations.
Question:
Who can help me if I have a concern about my pension?
Answer:
Contact the Michigan Pensions Rights Project at 1-866-735-7737
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