Expert: Allen - 1/24/2008

Question
My Mom asked for a cash out of her pension. She did all the paper work and sent a letter to inform them that she would take the cash out. This was in May 2007. They told her a check would be coming the first of November. She had asked them to direct deposit the check into her checking account. She passed away on Sept.20th, 2007. The check came to her old address, we did a change of address card for her but instead of forwarding the check the post office sent it back. We traced it to the bank just a few weeks ago.They sent it back to the pension people. Now the pension people are saying they get to keep it. Her spouse passed away about 10 years ago.
I say when she asked to cash out and they recieved her letter saying to do so, it now became her money.Once they issued the check they are commited to the deal. If the check would have been direct deposited as she had asked, it would be in her estate for all us kids to split. What do you think? Thanks for your help.

Answer
Unfortunately I don't have enough information to give you a good answer. The company may be correct if this was a defined benfit pension plan and it only paid benefits when the participant reached a certain age and did not pay benefits if she died before that age. On the other hand, you may be entitled to the money if it was a defined benefit pension plan with what is known as a pre retirement death benefit or if it was a profit sharing plan.

The best advice I can give you is to contact the local office of the U.S. Dept of Labor - Employee Benefits & Security Administration. They should be able to help you.

If the amount is substantial you may also want to hire an attorney who specializes in the pension area.

Good luck.