A pension plan is an agreement between an employee, their employer and, for some jobs, the union. Sometimes, the employer contributes and sometimes the employee does as well. Employers are not required to have pension plans. A federal law, the Employee Retirement Income Security Act of 1974 (ERISA), sets the standards for private pensions. It also provides guaranteed pensions in some cases.

Your Right to Participate

You must be permitted to participate if you are 21 or older and have worked for at least a year. This means your time at the job will be counted toward qualifying for retirement benefits. Many benefit programs offer the safety and convenience of depositing payment checks directly to your bank account.

Your Right to Information

ERISA requires that all plan rules be in writing. The plan administrator must explain all facts and rules about your employee benefit plan. You can get the plan rules, your employment records, and a statement of the credit you have earned to date. You can then find out when you will be eligible for benefits and can calculate the approximate amount of your benefits. You also may request copies of the Plan and Trust and a plan description, which outlines your rights, from the plan administrator.

Eligibility for Benefits

You earn credits by working in a job covered by an employee benefit plan. The plan rules specify how much work an employee must do to earn a year of credit. The rules also explain how many years of credits you need to qualify for benefits.

Payment of Pension Benefits

If you have not done so, it is wise to contact your plan administrator about pension benefits. The plan administrator has 30 days to give you written notice of your benefit amount and when you are entitled to receive it.

Some plans may offer early retirement benefits and disability benefits. Some plans may give you a lump sum payment if the amount of your benefit is less than $3500. When you select what type of retirement benefit you want, your spouse will usually be notified and asked to sign a release or consent form.

Most private employee benefits are taxable income once you start collecting.

Social Security and Pension Benefits

Under some pension plans, Social Security and pension benefits are integrated, which means that the amount of the pension can be reduced by all or part of your Social Security check. Since 1988, plans are required to leave at least half of your pension in the plan.

Survivor's Pension Benefits

Under most pension plans, employees can choose to have pension payments go to their surviving spouses. Check to see whether survivor benefits and early death forfeiture clauses are in your pension. Early death forfeiture means that your spouse does not receive benefits if you die before the early retirement age in the plan. If you die while you are eligible for employee benefits under an employee benefit plan, your spouse may receive a death benefit. If you wish to have someone else receive this death benefit, tell your plan administrator.

Your Right to Appeal

The plan administrator is required to let you know, in writing, if he or she denies your application for benefits payments. The plan administrator must give you specific reasons for the denial. You have the right to a full review of the denial by all the trustees of the plan. If you are still unhappy with the decision, you can file a lawsuit in federal district court.

The federal Railroad Retirement Board handles this benefit program for eligible workers and their families.

General Eligibility

Like Social Security, Railroad Retirement benefits are based on months of service and earnings credits. Employees of railroads engaged in interstate commerce, some related industries, railway associations, and national railway labor organizations qualify for Railroad Retirement after 10 years of credited work.

Retirement Benefits

Railroad employees with at least 30 years of service can get benefits (called "annuities") at a reduced rate at age 60. If they apply at age 62 or later, they qualify for benefits at the full rate. The rate paid depends on the employee's earnings.

Employees with fewer than 30 years of service (but at least 10 years) can get reduced benefits at age 62, and full benefits if they apply at age 65.

Spouses may be eligible for retirement benefits too, depending on the employee's age at retirement and years of railroad services.

A spouse of any age can get a spouse annuity when the employee qualifies for a retirement annuity, so long as the spouse is caring for the employee's unmarried minor child or a child who became disabled before age 22.

Divorced spouses may be eligible for an annuity, too. They must have been married to a retired employee for at least ten years and not remarried. Both the retired employee and the ex-spouse must be at least one month older then 62 when the ex-spouse applies.

Earnings After Retirement

Benefits are not available in any month in which a retired railroad employee works for a railroad industry covered by the retirement benefit law. Other kinds of earnings may result in reductions in benefits, similar to the reductions for Social Security retirement. These reductions end when the retired worker turns full retirement age.

Disability Benefits

A railroad employee with at least 10 years of credited service who becomes totally disabled for all regular work can get a disability annuity. For employees 60 or older with 10 years of service or of any age with at least 25 years of service, a second kind of disability annuity is available. This benefit is for employees permanently disabled from their regular railroad occupation. In some cases, disabled employees can get additional ("supplemental") benefits when they turn age 60 or 65, but they must meet several requirements to do so. The Railroad Retirement Board can give detailed information on these requirements.

Survivor's Benefits

The benefits are available to surviving spouses and children are similar to those offered by Social Security. For families who qualify, a one-time death benefit is available as well.

How to Apply

You must apply to receive any kind of benefit for yourself or your family. Call the nearest Railroad Retirement Board office to schedule an appointment to apply for benefits; be sure to ask what documents you will need to bring to show you are eligible.

Your Right to Appeal

If the Railroad Retirement Board denies, reduces, or ends your benefits, you may appeal its decision. You can appeal if it says it overpaid you, too. You can be represented by a friend, family member, paralegal, or attorney. The appeal process is very similar to that for Social Security benefits.
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