Pension Payout Nebraska

[Husker74]

Long Story here my co-workers husband had to leave his job because of medical reasons. He has been with his new employer for 2 1/2 years now but has yet to recieve his Pension Payout from his previous employer. The company he worked for had been bought out and the pension plan was turned into company stock. He keeps getting told that he has to wait 5 years to get his payout. I am not sure if the 5 years is something that was set in stone when the company was bought out at which time he was still employed there or if they are saying he has to wait 5 years after leaving his employment there. Is there anything that he can do?

[cbg]

Pension payouts are very highly regulated by law and it is quite likely that it would have been set in stone regardless of whether the company was sold or not. We can't read the pension plan from here, but I can tell you that it is not at all unusual for there to be a delay of several years before payout depending on the terms of the plan and the age of the pensioner at the time he retires (even a medical retirement).

[Husker74]

So there are no set deadlines that companies have to follow when it comes to paying out pensions. Even if a person quits to take a different job?

[cbg]

No, there is no law requiring an across the board release of pension payment at any given time, regardless of why he leaves the firm. It is entirely dependent on the plan document. (And since my first answer I have had the opportunity to check with an ERISA expert who says it is entirely possible that your husband's plan does have such a restriction -they are not, as I told you, uncommon.)

[tslintx]

The plan participant (your friend) should request a copy of the plan documents, both prior to the buy-out and after. Other documents that might be helpful would be anything in the buy-out related to the process of converting the plan to stock. These documents should back up the statements that the participant's payout can be held for up to 5 years. Your friend should pay particular attention to how his funds/investment in the plan are treated in the interim.

[Husker74]

The plan is known as an ESSOP. Not sure if that makes any differance?

[cbg]

It does not.

I realize that you want there to be a hard and fast law that says the distribution must take place immediately, but there is not. It is solely dependent on the plan document.