Admittedly, the title may be a bit misleading – there is no foolproof way to shield yourself from pension errors. Pensions and other retirement benefits are complicated beasts, often tracking 30+ years of an employee’s career history across multiple positions, companies, plan amendments and, typically, through at least one merger or acquisition.
Fortunately, there are a few ‘best practices’ which, if followed, may allow you to document the promises made to you along the way, so that any unwelcome surprise waiting for you when it is time to finally ‘cash in the chips’ may be resolved as expeditiously as possible – and in your favor.
Print out your pension statements and summaries quarterly.
These documents are generally updated on a quarterly basis – if not, you have the right to request updated statements at any time. Statements and accounts summaries can help you track accruals throughout the years and diagnose if, and when, an issue may have first arisen. They can also serve as valuable evidence should an appeal or lawsuit become necessary.
Save and/or scan every piece of correspondence you receive from either your employer or the plan.
A seemingly innocuous letter informing you of a ‘minor’ modification to the pension calculation formula today may be worth tens of thousands of dollars to you a decade from now – it is simply impossible to predict. While employers and pension administrators are required, by ERISA, to turn over all correspondence sent to pension participants upon request, generally the only way to verify compliance, and thereby ensure all relevant communications are accessible, is to keep your own file.
Ask for everything in writing.
While your regional manager may have an excellent memory and reputation for honesty, obtaining written confirmation in some form of every message delivered to you from either your employer or an agent of the pension administrator in relation to your pension is the only way to ensure those characteristics endure. Do not settle for handshake promises or announcements at the end of weekly meetings – ERISA requires all material modifications to your pension plan to be communicated either electronically or via mail.
When calling on your pension, document the first and last name of every individual you speak with, as well as an employee identification number and call number, if possible.
While the electronic recording at the beginning of your call may kindly inform you that your call is being recorded, it does not guarantee you access to that recording. Corporations’ data retention policies regarding recordings of calls are hardly transparent and rarely available, so if a call recording ever holds the key to evidencing your entitlement to a larger pension amount, do not be surprised if it has ‘unfortunately’ been purged under a ‘regular or routine’ data-deletion schedule. Even if the call recordings are available, administrators are typically unwilling to release those prior to litigation. Documenting names and any form of identification numbers is a best practice which can lend credence to a claim of explanations or promises made verbally, in the event the actual recordings are unobtainable.
Digitally preserve any unusual activity.
Modern technology enables you to prepare for the worst case scenario in real-time. If you notice unusual activity on your online pension portal, take screenshots and/or recordings of the abnormality. Document the URLs, export a PDF version of the webpage causing you concern. Any form of digital evidence is exponentially more persuasive, and valuable, than personal testimony.
Document each and every employment or financial decision you make which is predicated on your current understanding of your future pension entitlement.
From purchasing a new home to extending employment for another year, innumerable day to day decisions are based upon a basic understanding of the size of one’s pension – and rough calculations of where it should be at come retirement. Keep a journal in some form of these decisions, dating the point in time the decision was made and, ideally, what your current expected pension cash-out is. In the event issues later arise, a written record of your reliance upon calculations provided to you through past years is critical to maximizing your likelihood of recovering all that was promised to you.
While these ‘best practices’ may seem tedious, or even unnecessary, in light of your plan’s ‘superb’ funding status, the amounts potentially at stake justify surplus precaution. Creating your own paper-trail should give you peace of mind that you are preparing yourself for a worst-case scenario which could rob you of the satisfaction of reaching retirement.