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TOP TIPS - Reviewing Your Pensions - Is Everything Correct?

Non-resident aliens and other expats living in the United States have many complex issues to overcome in order to ensure their pensions are both optimised in their best interests and compliant with the rules and regulations of their relevant cross-border jurisdictions.

However, even outside of these considerations, there are many potential retirement planning pitfalls.

In this post we take a look at some Top Tips for ensuring that the basics of your US-generated pension are correct. As a non-US citizen living in the United States, you are not only entitled to a 401(k) or IRA retirement account, you may still also qualify for Social Security benefits. In fact, the Social Security Administration states that non-citizens who are "lawfully in the United States and meet all eligibility requirements" can get benefits*. However, it is important to remember that you may only be entitled to receive payment from either your private pension plan or Social Security payments if your details are correct.

Get hold of your Summary Plan Description

The best way to ensure that you are not left in the lurch as a result of errors or inconsistencies in your pension plan administration is to make sure everything is correct from the outset. Begin by obtaining a copy of your pension's Summary Plan Description (SPD).

All employers are obliged to provide an SPD to employees with a retirement or health benefit plan which is covered by the Employee Retirement Income Security Act (ERISA). The document acts as a detailed breakdown of the benefits, including how the plan works and how benefits are calculated and paid.

The SPD should be written in easy-to-understand language, should include the correct IRS number, the employer's name and address, the administrator's details and contact information, as well as documents relating to Health Insurance Portability and Accountability Act rights. It should also include ERISA disclosures and guidance on how the member can file a grievance or an appeal if necessary.

Review your pension details

Administrative errors and oversights in your pension plan can be catastrophic if not detected.

As such, if you are in the process of reviewing, tracing or planning your pensions, it is wise to consider the following questions:

  • Are your most basic details accurately recorded? Check your name (including correct spelling), your date of birth and your social security number.
  • Is all your relevant income – i.e. overtime, commissions, bonuses – included in the calculation of your benefits?
  • Have all your years of employment been calculated?
  • Has your all your work from a particular company been calculated? Has every role performed for that company been accounted for?
  • Has your plan been calculated using the correct social security data?
  • Has your plan been calculated using the correct benefit formula? For example, has the correct interest rate been applied?
  • Have all the assets in your account been correctly valued?
  • Has your employer matched your contributions?

If you have any doubts about the above, including whether correct and accurate mathematical calculations have been used, it is likely to be useful to have your pension details reviewed by a professional.

Keep records

Once you have your SPD and all other information you can review the entirety of your account information.

As time goes on you should keep records of everywhere you have worked, any company mergers that take place, as well as all the relevant salary, pension plan and benefit documents relating to these periods of employment.

Keep your details up to date

Lastly, stay active in the management of your plans. Keep your plan administrator informed of any important changes in your personal circumstances because they could affect your pension benefits, for example, divorce, marriage or the death of a spouse.

Contact Blacktower (US) LLC today

Retirement and pension planning can be a complex area in the United States, particularly if you are a cross-border individual who is looking for the right solution for your unique circumstances.

At Blacktower in the US we have the knowledge and expertise necessary to help you choose and enact the right strategy while you're in the US and to help you manage your UK pensions and any pension transfers.

We can help you review your pensions and make you fully aware of your responsibilities and options so that your retirement and pension plans are both optimised and comply with the rules of the Internal Revenue Service (IRS). We can also help with UK pension transfers for British nationals in the United States. Contact us today for more information.


Disclaimer: The provision of information in this communication is not based on your individual circumstances and does not constitute investment advice. Blacktower makes no recommendation as to the suitability of any of the products or transactions mentioned.


* https://faq.ssa.gov/en-us/Topic/article/KA-02447

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