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Marsha411JD, Lawyer
Category: Employment Law
Satisfied Customers: 20227
Experience:  Licensed Attorney with 29 yrs. exp in Employment Law
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I have a fully vested pension with my former employer that

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I have a fully vested pension with my former employer that has been sitting for 4 years. I am 591/2 and still working but I would like to collect my pension benefits from that plan either as additional income or to invest in a qualified IRA. The plan offers both the lump sum option and annuity. My problem is that when I contacted them about my available options I was told my only option was the annuity. I was told that my time had expired to make the lump sum option. I don't recall being advised of my rights in that regard.

Thank you for the information. Can you tell me what your specific legal question is? Are you asking if the employer can set rules for distribution of a pension? Also, is this an actual pension or is a 401K or what?
Customer: replied 3 years ago.

Sorry for the confusion. Its a pension plan that I am fully vested in at this time. My question is whether or not the plan was obligated to give me information about the amount of time I had to make my decision on how the monies could be distributed. I wanted the lump sum option but was told I only had a limited amount of time to make that decision and I'm not sure I was made aware of that time limit. so now my only option is the annuity.

Hello again and thank you for your reply. No need to apologize, I just wanted to make sure I didn't go off in the wrong direction. You are right that your employer or the Plan administrator has a duty to inform Plan participants of all of the material terms of the Plan, including distribution or rollover rules. Under ERISA, which is the Federal law that governs employer provided retirement plans and other employee benefits, the employer must supply the Plan participant with an SPD (Summary Plan Description) for the Plan. That document should contain all of the relevant deadlines.

If you did not receive an SPD, or it did not contain this restriction, then you have a couple of options. One is to file a complaint with the Employees Benefits Security Administration (EBSA) of the U.S. Department of Labor, which enforces ERISA, and the other is to file suit under ERISA for the oversight. I would usually recommend that you try the EBSA complaint first, since it is free and often and resolve the issue.

Having said all that, the SPD is the only notice that the employer is required to give. In other words, they don't have to remind an employee of a deadline, although that would certainly be the best business practice, it is not a legal mandate.

You can find out how to file a complaint with EBSA by going to:

Please let me know if you need any clarification. I would be glad to assist you further if I can.
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