Pension Lump-sum payout

[samsrp]

What is the name of your state? I live in Texas but the question is regarding a company I worked for in New York.

The company that I worked for for more that 17 years before resigning in 1997 recently made a revision to their pension plan. The change specifies that vested individuals employed on or after Jan.1, 2001 are eligible for a lump-sum distribution upon temination. I would like to recieve a lump-sum payout but this revision exludes me, is this legal? Would I have a "leg to stand on" if I made request for the payout?

 

[cbg]

Only someone who has read your pension plan in its entirety can answer your question. Consult local counsel.

 

[samsrp]

Thank you, I will do that. But can you tell me what type of factors may effect this situation? What would a competent lawyer be looking for in my pension plan to determine if I have a valid claim?

 

[Beth3]

An attorney will be reviewing whether the revisions to the pension plan comply with federal laws (ERISA regulations.)

I can tell you the odds are that what your employer has done is legal and that you are not eligible for a lump sum payout. Pension and retirement plans are heavily regulated by the federal government and it's very likely that any revisions the employer made to their pension plan involved several attornies and that the revised documents have been filed with the IRS and DOL and approved. Of course I can't guarantee the employer followed the necessary protocols but they'd been very foolish if they didn't. Penalties and potential criminal sanctions in situations like this can be quite significant.

I'm guessing but it sounds as though your former employer may be making the transition from a defined benefit plan to a defined contribution plan and that making these lump sum payouts absolves them of the responsibility to pay an actual pension to these employees.