p>Under a pension plan, an employer invests its funds on employees’ behalf. When an employee retires, the employee is entitled to payment of retirement income. This retirement income is known as pension benefits. The federal law that protects retirement benefits is known as the Employee Retirement Income Security Act (ERISA).
To obtain pension plan benefits, an employee must file a claim for benefits. The employee files the claim with the pension plan. In some instances, a plan will deny the claim. Employees may appeal this denial.
What Should Employees Do Before Filing a Claim for Pension Benefits?
Under ERISA, pension plans must provide a summary plan description (SPD) to employees. The SPD describes how the plan works, and who is covered. The SPD also describes the benefits available under the plan, how benefits accrue, and how to file a claim for benefits. In addition, the SPD outlines circumstances under which benefits are lost. An example of how benefits may be lost is when an employee retires early.
If an employee retires before a certain time, that employee may not be fully vested in the plan benefit. Being “vested” means an employee has a right in the benefits that cannot be forfeited. The SPD also states how long the plan has to review a claim for benefits, and how an employee may appeal a denial.
When Can I File a Claim for Benefits?
Under federal law, a plan must allow an employee to receive benefits at the later of:
- Attaining the age of 65 or the age your plan considers to be “normal” for retirement (if that normal age is earlier); or
- When you have attained ten years of service; or
- When you terminate your employment with the employer.
An employee, to receive benefits, must file a claim with the plan administrator. The administrator oversees the plan. Most plans provide that the employee must wait a certain amount of time before benefits are paid. During this time, the plan makes an eligibility determination on benefits.
If you satisfy the conditions for benefits eligibility, the plan must provide for benefit payments by a certain time. The plan must start to pay benefits within 60 days after the end of the plan year in which eligibility requirements are met.
What Happens After I File a Claim for Benefits?
Once you file a claim for benefits, the plan is entitled to take up to 90 days to arrive at a decision. The plan may take up to 180 days, if it notifies you that an extension of time is needed.
If the plan determines you are eligible for benefits, the plan will notify you of this. Benefit payments will then start. If the plan denies your claim for eligibility, the plan must provide written notice. The plan must provide, in plain language, a written statement that:
- States the specific reasons for why the claim was denied;
- Refers the person who sought benefits to the plan provisions the plan used to make the decision;
- States whether the plan needs more information from you, and what that information consists of, to approve the claim; and
- Describes in detail the plan deadlines and procedures for submitting an appeal of the denial for review.
How Do I File an Appeal?
If your claim is denied, you can file a request for an appeal. The appeal is required to be full and fair. Once you file your appeal with the plan, the plan has 60 days in which to review the appeal. If the plan decides it needs more time, it must notify you that it requires an extension of time. A plan can take an additional 60 days once it has notified you of its need for more time.
Once the plan’s review deadline is over, the plan must inform you, in writing, whether your appeal was granted or whether it was denied. If the plan denies the appeal, it must send you a written notice of denial. In that notice, the plan must inform you of the reason for the denial.
The plan must specify what plan provisions the denial was based on. The plan must indicate whether it offers any additional appeal levels. The denial letter must include a description of your right to seek review of the denial by a judge.
When Can a Judge Hear My Appeal?
After you have exhausted the appeal process, you can sue the plan in court. In your lawsuit, you can ask the judge to order the plan to pay all benefits currently owed, as well as future benefits. The judge, when considering your claims, will review the plan documents and apply the law of ERISA to reach a decision.
Do I Need an Attorney’s Help for Pension Plan Benefit Denials?
If you have received notice that your claim for pension benefits has been denied, you should contact an employment lawyer. An experienced employment lawyer near you can review the facts of your case. The lawyer can advise you of your rights and options. The lawyer can assist you in the appeals process. The lawyer can also represent you at court proceedings and hearings.