Tracking benefits your responsibility.

• Position: Pension Plans

The Pension Protection Act turned five years old in September. As companies rush to shore up pension--or cancel underfunded--plans, individuals need to protect themselves from common mistakes, cautions Rick Rodgers, author of The New Three-Legged Stool.. A Tax Efficient Approach to Retirement Planning. PPA was designed to close loopholes in the pension system; it addresses problems for the roughly 34,000,000 Americans covered by traditional pensions known as defined-benefit plans.

PPA requires pensions to be funded fully by 2015. It also prevents companies with big pension deficits from skipping annual contributions and still pronounce their plans healthy. Another major goal of the bill is to shore up the health of the Pension Benefit Guarantee Corporation. PBGC is an agency of the Federal government that insures private pension plans. Some 147 pension plans failed in 2010, which increased the PBGC deficit to $23,000,000,000. The agency assumes terminated plans and pays benefits to retirees up to a maximum of $54,000 if they retire at age 65 or later, Rodgers points out.

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One problem not addressed by PPA is pension miscalculations. Anytime you change jobs or take a lump-sum pension cash-out, you are at risk. Women especially are vulnerable to pension mistakes because they tend to move in and out of the workforce more often than men. For the most part, pension mix-ups are not intentional.

How would you know if there was an error that had been compounding for many years? How can you ensure that you will get what rightfully is yours when retirement arrives? It is up to you to keep track of your own pension. Know your rights and monitor your retirement plan before the "golden years" creep up on you, Rodgers emphasizes.

Educate yourself about how your plan works. Contact your company benefits officer and ask for a copy of the plan, not the summary plan description. In May, the Supreme Court ruled that you cannot depend on a summary, which is an abbreviated form of the plan. The Court held that, if there are discrepancies, the plan is the controlling document. You need a copy of the plan to determine how your pension is calculated.

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