FAQs on SSA Potential Private Retirement Benefit Information

FAQs on SSA Potential Private Retirement Benefit Information U.S. Department of Labor Employee Benefits Security Administration April 2012 I received an SSA Potential Private Retirement Benefit Information notice. What does this mean? This notice was sent to you by the Social Security Administration (SSA) because you filed a claim for social security benefits. It is a reminder about private employer retirement benefits that you have earned, also called "deferred vested benefits". The Internal Revenue Service (IRS) provided this information to SSA. The information is provided to the IRS by the plan administrators of the private retirement plans that you participated in while you were an employee. You may have already received some or all of these benefits. You should review

the plan information on this notice and contact the plan administrator identified to make a claim for any benefits due to you. When should participants expect to receive distributions from their retirement plans after terminating employment? Generally, the law requires plans to pay retirement benefits no later than the time a participant reaches normal retirement age. But, many plans -- including 401(k) plans -- provide for earlier payments under certain circumstances. For example, a plan's rules may allow participants in a 401(k) plan to receive payment of benefits after terminating employment. The plan's Summary Plan Description (SPD) should set forth the plan’s rules for obtaining the distribution as well as the timing of distribution after termination of employment. Can an employer sponsor more than one type of retirement plan? Might I be eligible for retirement benefits under more than one plan? What if I am already receiving retirement benefits? Yes, an employer may, but is not required to, sponsor more than one type of retirement plan, such as a 401(k)-type plan and a traditional pension plan. If your former employer sponsored more than one type of plan, you may be eligible for retirement benefits from more than one plan. For example, you may have received benefits from a 401(k) or other defined contribution plan at the time you terminated employment, but still be due benefits from a traditional pension (defined benefit) plan. Check with the plan administrator listed on the notice to determine if you have benefits owed to you. Generally speaking, there are two types of retirement plans: defined benefit plans and defined contribution plans. A defined benefit plan promises you a specified monthly benefit at retirement. The plan may state this promised benefit as an exact dollar amount, such as $100 per month at retirement. Or, more commonly, it may calculate a benefit through a plan formula that considers such factors as salary and service - for example, 1 percent of your average salary for the last 5 years of employment for every year of service with your employer. A defined contribution plan, on the other hand, does not promise you a specific amount of benefits at retirement. In these plans, you or your employer (or both) contribute to your individual account under the plan, sometimes at a set rate, such as 5 percent of your earnings annually. These contributions generally are invested on your behalf. You will...

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