30 Serious Errors and Problems Found in Pension and Profit Sharing Plans

1 Your employer's plan calls for all compensation paid to you to be used in determining your retirement benefits. Your bonuses and overtime were deleted from the computer run resulting in a portion of the contributions and benefits that should have been accumulated for you being unpaid.
2 The administrators credited your profit sharing account with the forfeitures and earnings from the wrong year.
3 You are leaving a profit sharing plan and the administrators have valued your account on the basis of the fair market value of the assets at the beginning of the year instead of at the end of the year when the stock market had increased substantially.
4 The administrators have cashed you out of the plan on the basis of an old vesting schedule rather than the new, more favorable, schedule.
5 For purposes of vesting, the administrators failed to include your service with a related company.
6 You're in the profit sharing plan but the administrators have failed to include you in the pension plan, even though you qualify.
7 You're being cashed out of your employer's pension plan. The administrators have used the wrong years of service for you in determining your benefits.
8 The wrong computer disk is being used to update files. Your current benefit statement reflects the same information that was on your benefit statement 4 years ago!
9 Many years after you leave a company and reach age 65 there is no pension distribution paid to you, as the company you worked for is out of business or has moved to a new location and has changed its name and you don't know how to find it.
10 The company has numerous divisions and each one has a different plan. The administrator is working on cashing you out of the pension plan but is using the information from another division's plan.
11 Your service with one division was not counted toward the pension plan of another division. As you leave your employer, it is preparing to pay you substantially less than you're entitled to receive.
12 The plan trustees have improperly invested your plan money and, as a result, you are getting a payout that is a fraction of what you should receive.
13 The staff from the plan administration department is constantly turning over and no one is familiar with your file.
14 After many years of continuous service, the plan administrators show you having a break in service of several years when, in fact, you had no such break in service.
15 Your company merged with another and the benefits of the new plan do not give you the minimum benefit promised by the old plan. Furthermore, the executives and plan administrators from the old company are no longer available to help you.
16 Computer software used by the plan administrators has serious design flaws.
17 You went from union to non-union status. The administrators failed to take into consideration your union benefits when determining your total benefits.
18 Your pension plan was amended to raise benefits but the administrators are still using the old benefit formula.
19 The company counts your five highest compensation years of service toward retirement. When calculating your benefits they used your last five years and failed to review your compensation from many years ago when commissions you earned resulted in much higher compensation that should have been used in calculating your benefits.
20 Your employer entered into prohibited transactions that resulted in the loss of substantial funds for the participants in its plans. A prohibited transaction is an investment the law does not allow.
21 Your supervisor incorrectly reported your wages to the benefits department.
22 Your plant is closing down or you are part of a large group of employees that are being discharged. There are Internal Revenue Service rules that could make you 100% vested even though your employer has treated you as only partially vested.
23 As a participant in your employer's plan you are making contributions from your own money in addition to what your employer contributes. When you leave the company the administrators fail to include the benefits funded by your own money.
24 Many years ago you participated in a plan that was discontinued by your employer. The administrator "froze" the plan (meaning no more contributions would be made to that plan, but as people left the company, the plan would pay them off their rightful share). Now, many years later, you are leaving the company and the administrators pay you from the current plans but not the "frozen" plan.
25 The administrators fell behind in their work and contributions and benefits were not posted to your account. Furthermore, one or more years later no one caught this error.
26 Your employer illegally took money from the pension or profit sharing trust. Now as you retire there is insufficient money available to fund your retirement.
27 Records were destroyed or misplaced and the employees were not told about it. As the administrative staff does its work they are trying to reconstruct your files for many, many years.
28 You're eligible for early retirement but no one has informed you. Had you been told, you would have been able to take your money out in a lump-sum distribution.
29 The pension fund administrators are working with a plan that provides for various benefit options and requires many complex calculations to determine the highest benefits for you. They make a mistake and pay you on the basis of the option with the least amount of money.
30 Wrong assumptions and methods were used to determine your benefits. Had the correct tables been used you would have received substantially more money.
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