Denial of Pension Benefits

Pension benefits are retirement incomes that employees are entitled to receive upon retirement. These benefits are protected under a federal law called the Employee Retirement Income Security Act (ERISA).

To receive pension benefits, employees must file a claim with their pension plan, and they may need to appeal a denial if the plan does not approve the claim.

What Should Employees Do Before Filing a Claim for Pension Benefits?

Before filing a claim, employees should review the summary plan description (SPD) provided by their pension plan. The SPD contains essential information about the plan, such as coverage, benefits, vesting rules, and procedures for filing a claim or appealing a denial. Understanding this information is crucial to ensure employees do not lose their benefits.

When Can I File a Claim for Benefits?

Employees can file a claim for pension benefits when they meet specific eligibility criteria outlined under federal law. Typically, these criteria involve attaining a specific age or completing a certain number of years of service with the employer.

Examples of eligibility criteria for pension benefits under federal law may include:

1. Normal Retirement Age: An employee can file a claim for pension benefits upon reaching the normal retirement age specified by the plan, which is often 65 years old. However, some pension plans may have a different normal retirement age, which can be earlier than 65 years.
2. Early Retirement: Some pension plans may allow employees to retire early and receive pension benefits before reaching the normal retirement age. In such cases, employees might need to meet specific requirements, such as having a certain number of years of service with the employer or being at least a certain age (e.g., 55 or 60 years old).
3. Years of Service: Pension plans may require employees to have completed a specific number of years of service with the employer to be eligible for benefits, for example, 10 years of service. This requirement helps ensure that employees are committed to the company before they can access their pension benefits.
4. Vesting Schedule: Pension plans may have vesting schedules that determine an employee’s eligibility for benefits based on their years of service. For instance, a plan might have a vesting schedule where an employee becomes 20% vested after three years of service, 40% vested after four years, 60% vested after five years, and so on. Once an employee is fully vested, they are entitled to the full amount of their pension benefits.
5. Employment Termination: In some cases, employees may be eligible for pension benefits if they terminate their employment with the employer after meeting specific criteria, such as a minimum number of years of service or reaching a certain age.

Upon meeting these requirements, employees must submit a claim to the plan administrator, who will determine eligibility and initiate the benefits payment process.

What Happens After I File a Claim for Benefits?

After filing a claim, the pension plan has up to 90 days to decide, though it can extend this period to 180 days if necessary. If the plan approves the claim, benefits payments will commence. However, if the plan denies the claim, it must provide a written notice detailing the specific reasons for the denial, any additional information required, and the procedures for appealing the decision.

Examples of specific reasons for the denial of a pension benefits claim may include:

1. Insufficient Vesting: The employee has not met the required vesting period, meaning they do not have a non-forfeitable right to their pension benefits. Exclusion of benefits may happen if an employee has not worked for the employer long enough or has not met other vesting requirements outlined in the pension plan.
2. Ineligible Employment Termination: The employee’s termination from the employer does not qualify them for pension benefits, either due to the circumstances of the termination or because they have not met the required years of service or age criteria.
3. Early Retirement Penalties: The employee has opted for early retirement, and the pension plan imposes penalties or reduces benefits for retiring before the normal retirement age.
4. Missing or Incorrect Information: The claim is missing essential information, such as the employee’s Social Security number, employment history, or other required documentation. Alternatively, the information provided is incorrect or inconsistent, leading to the denial of the claim.
5. Plan Limitations or Exclusions: The pension plan has specific limitations or exclusions that result in the denial of the claim. For example, some plans may have a maximum benefit cap or exclude certain types of employees from being eligible for benefits.
6. Suspended Benefits: The plan may temporarily suspend benefits due to certain circumstances, such as the employee returning to work with the same employer after retirement or the plan’s financial status.
7. Incomplete or Inaccurate Application: The employee has not filled out the claim application properly, leading to a denial. This denial could be due to incomplete sections, missing signatures, or inaccuracies in the application.
8. Lack of Required Service or Age: The employee has not met the minimum years of service or age criteria outlined in the pension plan, which are necessary to be eligible for benefits.

How Do I File an Appeal?

In case of a denial, employees can file an appeal with the pension plan, which must conduct a full and fair review of the appeal within 60 days. This period can be extended by an additional 60 days if the plan requires more time. After reviewing the appeal, the plan must inform the employee in writing of the outcome, detailing the reasons for denial if the appeal is not granted.

When Can a Judge Hear My Appeal?

If the pension plan denies an employee’s appeal, the employee can sue the plan in court after exhausting the appeal process. In a lawsuit, the employee can request the judge to order the plan to pay owed and future benefits. The judge will review the plan documents and apply ERISA law to make a decision.

Do I Need an Attorney’s Help for Pension Plan Benefit Denials?

If an employee’s claim for pension benefits is denied, it is advisable to consult with an employment lawyer. An experienced attorney can help review the case, advise on rights and options, assist with the appeals process, and represent the employee in court proceedings and hearings.

LegalMatch is an online legal matching service that connects you with qualified and experienced attorneys practicing in various areas of law, including employment law and workers’ compensation. Using LegalMatch’s platform, you can submit your case details and receive responses from multiple attorneys interested in taking on your case.

By using LegalMatch, you can compare attorneys’ credentials, experience, and fees before deciding whom to hire. LegalMatch can help ensure that you find the right attorney to assist you with your pension plan benefit denial case.

Additionally, LegalMatch offers a satisfaction guarantee. If clients are not satisfied with their attorney’s services within the first 60 days of representation, they can request a new attorney from LegalMatch’s network at no additional cost.

Use LegalMatch to help streamline the process of finding and hiring an attorney to assist with a pension plan benefit denial case and provide peace of mind that your legal rights and interests are being protected.