How to Avoid Losing Pensions from Previous Jobs

While an employee is working on a job at a traditional workplace, either that person or the workplace itself may regularly dedicate parts of the employee's earnings to an investment fund called a pension. This will become a source of money that regularly delivers funds to that person once he or she has retired; however, it is very common for working people to switch workplaces during their careers. Each workplace provides its own pension for each of its regular employees, so when a person retires, he or she will have to remember to pick up every pension at every workplace they worked at in order to gain the full scope of their entitled retirement benefits.

Unfortunately, it is quite common for working people to miss out on at least some of the pensions waiting for them either because they have failed to remember the people at their former workplaces who managed their pension plans or because the businesses and workplaces they used to work at are no longer quite the same. For example, the business that employed the person may have either shut down or merged with other corporations. Since a person's retirement can come quite literally decades after leaving a particular workplace that ended up closing shortly afterward, it can be a harrowing challenge to even work out where to start looking for potentially significant pensions. The person may even have to hire someone to locate them.

A pension that was established during a worker's brief position at a particular workplace can equate to a higher amount of retirement money than what might be expected for a "mere" several years worth of work there. In fact, this is why someone who is only planning to work at a specific employer for a short time should strongly consider joining that workplace's pension plan regardless; one only needs to own a particular pension over several years of work at that location in order to become entitled to its benefits. Getting a pension plan going at a workplace is ideal because it is the employer who will ultimately be funneling funds into the plan on the worker's behalf.

Much of what can be done to ensure that pensions will be easily collected during a person's retirement years is only doable throughout their years spent working at a business. Obviously, keeping and preserving all relevant documentation connected to the pension plan is extremely important in the long term, but in order to do that, there needs to be a solid avenue of contact maintained between the worker and the administrator overseeing the pension plan. While working at a company, an employee will normally see information about their pension on their annual statements; however, employers will not be automatically providing that same information to employees who left. The administrator, therefore, needs to know the former worker's address so that the worker can eventually be contacted when it is time for the pension to apply itself. Until that time comes, the former employee should call the administrator regularly in order to receive updates.

However, while the entities that would pay a worker his or her entitled pension are legally obligated to do so once the time arrives, their efforts to contact that person may come across a serious obstacle if the former employee no longer even uses that address. If the employee moved, they will have to research the employee's new residence in order to reach him or her, and this will be especially difficult if the employee moved to a different country. A person who changes jobs and moves to a new location, therefore, needs to maintain a list of businesses that he or she must remember to contact in order to provide updated address information.

While it is possible that the pension earned at a prior workplace can be transferred to the pension the employee is earning at their current workplace, this is not always the most financially advisable course of action. Employees, therefore, should be seeking financial consultation about this and other topics both from their employers and from independent advisers. If it is decided that the employee will leave behind their prior pension so that it can be collected later, one group that they may refer to for information on it is a labor union if that union represented the employee at some point.

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