We have heard about the data. In 2015, the Labor Department’s Bureau of Labor Statistics published a study indicating that the average worker could expect to hold 12 jobs during his/her career. More recently, another study indicates that among younger workers (ages 25-35), job changes are occurring once every 2.8 years.
Many of these jobs are temporary or independent contractor arrangements. Those folks are typically not eligible to participate in qualified retirement plans under the Employee Retirement Income Security Act (ERISA). Nevertheless, many people are eligible, and many do participate, sometimes without realizing that they are participants. That may seem improbable, but we have run into a broad range of clients from CEO’s to hourly employees who cannot decipher their own paystubs. Bear in mind that if the employee is enrolled in a defined benefit retirement plan, the paystub is not going to reflect participation.
Let us suppose the employee is in the 25-35 age range and leaves after this reported 2.8-year period. He or she may have put away $9,000 in contributions and seen it matched by the employer with another $4,500. The employee leaves and takes on new employment. Then, after several moves, the retirement administrator could lose track of the participant’s address. The employee in most instances could, in fact, should, roll the defined contribution benefits to an IRA or a subsequent plan. However, that’s something that is often ignored or forgotten.
This problem is so common that the Pension Benefit Guaranty Corporation has done something to try to remedy the problem. Their approach actually comes at it from a different angle. Many businesses close, merge or are acquired by others. Their employee retirement benefits are separately held and the company the employee worked for may no longer exist even though the retirement benefits are still there.
I have not experimented with the website but it is there online if you click here. Another resource they offer on their site is a page to contact them about unclaimed pensions. Click here to be transferred to that page.
In prior postings, we have suggested that attorneys recommend to clients that they secure their own credit reports so that they can make certain they know all of their marital debt and to assure themselves that their spouse has not fraudulently applied for credit using their identity. We have also observed situations where an adult has secured credit in the names of their parents; even their in-laws, because that person has access to data related to social security or bank accounts of those people.
Needless to say, some parties to divorce are knowingly guilty of allowing benefit plans to be undisclosed. It can and should be embarrassing for a person to be confronted with an undisclosed benefit he or she otherwise had a duty to disclose. In most instances, the amount may be trivial, but Pennsylvania law more or less defines trivial as “less than $500.” Clients need to investigate their own financial houses on both the asset and liability side before casting stones at others in the divorce process.