Is Your Pension Safe?

The media is loaded with reports of pensions going the way of the Do-Do bird. With the recent bankruptcy filing of Delta Airlines, no one knows what Delta’s employees will get when it comes time to retire. What they do know is that it won’t be what they thought it would be. As United Airlines employees have learned.

Because of the growing concerns with major companies and their shrinking pension plans, you may fear your money won’t be there when you need it. 

As an employee, when company gets into financial trouble, you can be affected long before you know about it. Tax payments, including contributions to Social Security can be delayed, even ignored. Contributions to pension plans including 401(k)s can be delayed, even ignored. 

Your paycheck may reflect a payment has been with hold. You assume that the contribution has been made in your name. Has it?

In the old days, whatever got stashed away was considered sacred. Ma Corporation would pay what she had promised. Today, that’s not the guarantee. So, the question becomes, “Are you participating in your company’s pension plan?” “How’s it doing?” “For that matter, how’s the company doing?”

If you are the owner or principal in a company, there are smart steps to take to help prevent thieves within the workplace. If you are an employee, ditto. Here’s where to start.

For the Company …
According to Cindy Graham, author of Who Else is You? (, businesses should make sure their company has strict audit policies and monitor all funds closely. 

“An indication that moneys are being used inappropriately includes delays in deposits or the receipt of bank statements.” Graham recommends that small companies have their bank statements sent to the home address of the President.

Let your employees know good news and not-so-good news. No one likes surprises, especially when it comes to money. Give them information on how to access their accounts, who the plan administrator is and reports showing accurate balances. Include phone numbers, emails, websites and addresses for contacts.

As a company, it’s imperative to pro-actively monitor any pension or profit sharing plans, as well as financial statements that are prepared. Don’t limit information to just once a year. It may not be enough to provide your employees with confidence that their accounts are safe.

When the employer provides information, it builds trust in your company and security that their pension moneys will be there when they need it. 

For the Employee …
Cindy Graham is an expert in identify theft and has come across just about every gimmick to separate you from your money, both within the workplace and outside of it. She’s come up with several items that an employee should pay attention to:

Find out the rules. Different plans have different depository rules. Become familiar with procedures for depositing contributions. 

Call. Call the plan administrator at least twice a year to ensure your account information is accessible and matches your statements. 

Access accounts online. The majority of providers offer online access to 401(k) statements. 

In addition, Graham says that there are warning signs when monitoring plan accounts. If you notice any of these changes, call your plan provider immediately. If it is a legitimate change in your statement, they will say so.

Changes in statement logo. If false statements are being generated the logo may be the first indicator. Has it changed, even slightly, since the last statement? Is the color the same? Companies usually send out a notice about upcoming changes in their statement and how to read their new statements. If a statement changes suddenly, without notice, something may be wrong. 

Watch the statement messages. Some statements include a brief topical message which may pertain to the season, local concerns, new funds that are available, whatever. Look at some prior statements. Fraudulent statements may eliminate these messages.

Your Social Security number. It is common practice not to include the SSN on statements. If your SSN suddenly shows up on your statement, it may be fraudulent. If it is normally included, call to have them remove it. 

Change in Beneficiary. Check beneficiary status every year. Even if you don’t make a change, check the beneficiary to ensure it has not been changed.

Other warning sings include frequently changes plan administrators, difficulty getting information on your account, statements not received on a regular basis, deductions from your paycheck are inconsistent, sudden drops in your balance that is unrelated to the stock market and access to online account information is denied.

Finally, if you suspect mishandling of an account, you can contact the Department of Labor at 866-444-3272.