Each year, millions of dollars of pension money go unclaimed. Government agencies alone are holding more than $30 billion dollars in unclaimed money. Pensions go unclaimed often when the original owner changes his name or his address, his records are illegible, or when there are clerical errors. The most common reason for an unclaimed pension is that the owner dies before he can claim it. Family members are often unaware that they are entitled to this money. Very little effort is usually made to find the heirs of an estate when the owner dies.
Private Pension Plans
Owners of private pension plans usually make little to no effort to locate beneficiaries when a pension owner dies. Lost beneficiaries often do not show up in pension company databases. This is especially true after pension companies have merged or gone out of business. On the brighter side of things however, private pensions are often insured by the government, so if you are a lost beneficiary, you might be entitled to at least some benefits. The Retirement Equity Act of 1984 ensures that surviving spouses are paid benefits, unless the pension holder had opted out.
The federal government has declared that it holds $133 million dollars in unclaimed pensions.In 1986, the Federal Employee’s Retirement System Act created The Thrift Savings Plan. This savings plan is similar to the 401(k)s used in the private sector. It gives federal government employees a tax-saving way to save and invest for their retirements. Reclaiming these government pensions are complicated by the fact that records for these pensions at the Office of Personal Management Retirement Operations Center are not computerized yet. For this reason, unclaimed federal retirement benefits will not show up on any computer search of lost property. Unclaimed pensions are declared abandoned on the employee’s 115th birthday, or thirty years after the employee’s death. The government, too, makes little effort to find lost beneficiaries, so you should take the initiative to find any money you are owed yourself.
Claiming a Lost Pension
To claim a lost pension in your name, check with the various benefit insurers that you have been associated with. Contact the company that owns the directory and provide proof of your identity. The federal PBGC provides a free of charge service for finding pensions whose data has been computerized. This database also includes private sector pensions. Check with this service before paying for any pension searches. The agency asks that you provide them with details such as proof of age and other vital statistics. It takes 4-6 weeks to make sure that you are entitled to benefits. Beneficiaries usually receive their first checks within two months of the initial application. Those entitled to future benefits will receive them after reaching the age of retirement. The PBGC reports that there are at least 30,000 unclaimed pensions in their database. These unclaimed pensions average about $5000 dollars, and top out at $611,028 dollars. New York, New Jersey, Texas, Pennsylvania, and Illinois have the greatest number of unclaimed pensions.