July 21, 1997
Constantly changing pension and tax laws have left pension plans so complicated that many retirees are being short-changed, experts say. In fact, a company in Illinois, the National Center for Retirement Benefits Inc., devotes itself to reviewing payouts from pension, 401(k), and profit-sharing plans.
If NCRB discovers an error, it keeps 30 percent of whatever is recovered.
- Some 45 million Americans are covered by pension plans.
- While intentional fraud is rare, say pension actuaries and attorneys, the bulk of errors result from simple miscalculations or other administrative mistakes -- such as using inaccurate compensation or other employment data.
- A pensioner has six years from the first payment to investigate and recover any money owed from an incorrect payout.
- NCRB officials say about half the pension payouts they investigate result in more money for employees.
Experts say that even little mistakes can cause big problems and big pay-outs -- often into the tens of thousands of dollars. Proposals are before Congress to simplify understanding retirement plans.
Source: Kerry Capel, "Is Your Pension All It Should Be?" Business Week, July 21, 1997.
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