Looking for Unclaimed Pension Funds? Try the PBGC.
Although the rules and regulations governing the reporting, custody and claiming of abandoned or unclaimed property are generally a matter of state law, there are a few areas that involve the federal government. Examples are unclaimed savings bonds and deposits held by failed banks. Another example is unclaimed pension benefits.
Prior to the enactment of the 1974 Employee Retirement Income Security Act (ERISA), many companies went out of business and/or ceased operations without sufficient funds to pay accrued pension benefits for retired and active workers. One of the most famous examples was the so-called “Studebaker Incident” where the closing of that automaker’s plant in Indiana left thousands of employees without pensions. Although the enactment of ERISA did not require any company to create a benefit plan, it did require companies sponsoring benefit plans to maintain certain funding levels and required measures to safeguard pension funds. ERISA also created the Pension Benefit Guaranty Corporation (PBGC), a government entity funded by insurance premiums and the assets of failed pension plans, which pays benefits to more than 600,000 retirees of more than 3,800 terminated or failed pension plans.
What does this have to do with unclaimed property? It is perhaps no surprise that some pension benefits (especially those relating to terminated or failed plans) go unclaimed by the rightful owners and/or their heirs. Accordingly, the PBGC maintains a searchable database of missing retirees for whom the PBGC holds assets. Notably, the assets held by the PBGC relate not only to long forgotten companies but also currently operating companies that may have suffered a past bankruptcy or other adverse financial situation. If you or someone you know is owed a pension – especially from a company that is now out of business or previously declared bankruptcy – it may be worth checking.