The ERISA consultants at the Columbia Management Retirement Learning Center Resource Desk regularly receive calls from financial advisors on a broad array of technical topics related to IRAs and qualified retirement plans. A recent call with a financial advisor in Washington is representative of a common inquiry involving notices received by plan participants. The advisor asked:
“My client received a notice from the government telling him he may have retirement benefits with a former private employer. What is this notice?”
Highlights of Discussion
• What your client likely received was a SSA-L99-C1, Potential Private Pension Benefit Information form from the Social Security Administration (SSA).
• When an individual files a claim for Social Security benefits, the SSA automatically issues this notice to alert the individual that the SSA has knowledge of potential other retirement benefits through former private employers that he or she may be entitled to receive.
• Your client may already be well aware of these additional benefits — and may have already received some of or all of them. But if not, you should review the plan information on the notice with your client and contact the plan administrator identified to make a claim for any benefits that may be due. Some or all of these benefits may be eligible for rollover.
• The SSA keeps a database of individuals who have been identified by the IRS as having qualified for pension benefits under private retirement plans. When a former employee leaves behind accrued retirement benefits in an employer’s retirement plan, the employer must report such information to the IRS. It is estimated that approximately one-third of individuals leave behind their assets in a previous employers’ plan, as apposed to rolling them over or distributing them (see EBRI Notes, November 2013).
• The information on the SSA form is somewhat limited. Fortunately, the Department of Labor (DOL) has put together a helpful Q&A piece on this topic: FAQs on SSA Potential Private Retirement Benefit Information.
• Your client can contact the DOL with additional questions as well either on-line at http://www.dol.gov/ebsa/contactebsa/consumerassistance.html or by calling 1-866-444-3272.
Conclusion
The Potential Private Pension Benefit Information form is just another way that “Big Brother” is looking out for retirees.
The Columbia Management Retirement Learning Center Resource Desk is staffed by the Retirement Learning Center, LLC, a third-party industry consultant that is not affiliated with Columbia Management. For informational purposes only. Please consult a tax advisor or attorney for specific tax or legal needs. © 2013 Columbia Management Investment Advisers, LLC. Used with permission.
