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I need my pension money now to avoid losing everything I own.. its that simple, except I am on 54.

Rockford, IL |

Out of real work for 4 years now after 32 years of steady employment with one company. I should be fully vested. I would like my pension early pleading hardship. I am only 54, but only have enough cash to for about the next 6 months, then I would probably lose everything, including the house I have lived in for 29 years.. when I legally would take my pension payments , it only pays a lousy 525.00 a month starting at 61.5 years old. I have to assume it has a cash value of some 85-90 thousand dollars right now. Anyone have a good idea .. I am only thinking pension right now.. 500 a month 7 years from now is a slap in the face, but 85-90000 in a lump sum early is another story. I could pay off my house,car, visa, and still have enough to pay the silly tax I am stuck with next April..

Attorney Answers 3

Posted

All depends on what is allowed or not in the Pension Plan Agreement. There may be a way to monetize your expected annuity with a 3rd party company as well like Peachtree or JG Wentworth. Speak first with the H/R Manager as to your plight as the Plan itself may allow the Plan sponsor (your employer) to recalculate your benefits for early retirement and allow access now for "hardship" reasons.

My answer is not intended to be giving legal advice and this topic can be a complex area where the advice of a licensed attorney in your State should be obtained.

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Asker

Posted

you mention Pension Plan Agreement. In the past when I talked to the pension dept, they tell me the plan does not allow. Is this a Federal law or just the corporate boys idea of power or can they be made or asked to change policy in certain cases/ Thanks for reply...

Asker

Posted

Also, I have come across some articles on the internet, that you can hit your pension monies at age 55, that allows a lump sum of 25% can be taken out with no penalty of tax and the rest can be rolled into a IRA. Have you heard anything like that? thanks

John P Corrigan

John P Corrigan

Posted

Plan Agreements can be all over the place in terms of covering an issue like this. there is no Federal requirement to force it upon a Plan sponsor BUT you need to have someone competent review the actual Plan. It is essentially a contract review with a specific question and it will either be directly discussed, indirectly mentioned but vague or not mentioned at all. If not mentioned or vague then you have a chance at amending the Plan agreement to create a new provision that could help you, albeit the Plan sponsor may be loathe to make any changes due to costs of redoing it.

John P Corrigan

John P Corrigan

Posted

Please see following abstract from U.S. Dept. of Labor that answers your exact question. As I said earlier, your particular plan COULD have a provision to allow for such hardship withdrawal but it is not required. Your research may be focused on a different type of plan (like a 401K plan) which is called a "defined contribution plan" which is not the kind of plan you are in (you have a defined BENEFIT plan which pays a life annuity so not same thing at all). DOL EXTRACT: Can you get a distribution from your plan if you are not yet 65 or your plan's normal retirement age but are facing a significant financial hardship? Again, defined contribution plans are permitted to – but not required to – provide distributions in case of hardship. Check your plan booklet to see if it does permit them and what circumstances are included as hardships. If you are in a defined benefit plan (other than a cash balance plan), you most likely will be required to leave the benefits with the retirement plan until you become eligible to receive them. As a result, it is very important that you update your personal information with the plan administrator regularly and keep current on any changes in your former employer's ownership or address. If you are in a cash balance plan, you probably will have the option of transferring at least a portion of your account balance to an individual retirement account or to a new employer's plan. If you leave your employer before retirement age and you are in a defined contribution plan (such as a 401(k) plan ), in most cases you will be able to transfer your account balance out of your employer's plan.

Posted

If your plan does not allow you to obtain your benefit now then the plan cannot offer you an exception to the rules. Your plan may allow you to take early retirement, so you should check. Not all plans offer a lump sum payment, so you can only receive a lump sum if your plan allows it.

You are making lots of assumptions but you need to review the plan documents to determine what options are available.

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Posted

I don't believe I'm assuming anything. I am just trying to get a hold of much needed monies that were set aside for me in a pension that should have had a hardship clause in it for the very reason my original question implied. At this time the money would be much more beneficial to me now in what I believe is a larger sum capable of paying off a home (etc) that I do not want to lose after 29 years, (and have put 200000.00 into in payments and taxes over those years) rather than have a 500.00 slap in the face check per month that won't even cover the drugs that I may be taking at the time. Alot of my retired former co-workers feel the same way, and have told me so, but at least they made it to retirement and were not forced out do to economic conditions that existed in 2008-9-10-11-12-13 and so on.. I just re-read the pension packet that I was given when I was let go 4 years ago. No hardship clause that I can see.. There should be one though IMO.. Thanks for your reply''

Posted

Contact your pension plan administrator. Some plans allow for hardship loans or emergency withdrawals. There may be other options or no options at al. It would be best to start by speaking to someone at the office of your administrator. Best wishes.

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