Taking Care of Mom and Dad: What You Can Do to Help

If there's one thing you can do as a son or daughter, it's ensuring that your parents receive the benefits they have earned. Every year, tens of thousands of Americans don't receive their full pension benefits. Why? The most common reason is an error by the employer, including employer ineptitude and confusion about federal pension laws. Benefits get miscalculated and no one ever checks them.

Check your parents' benefits before they are finalized. Make sure they request an individual benefits statement, a summary plan description and a summary annual report. If your parents ever left a job, retired or switched jobs, check for any benefits that might have been lost in the transitions. Calculations can get complicated, especially when mixed with other types of retirement plans, like 401(k)s and investment accounts. Having an actuary or accountant walk you though these calculations might be a good idea.

Two of the biggest factors that cause problems in benefits calculations are length of service and salary.

There aren't supposed to be any fuzzy or gray areas in pension plans; but, sometimes, there are. Problems do arise and knowing when to hire a good actuary to help is key. Not only do employees have questions, but employers do, too.

Help your parents take charge of their pension benefits. If they haven't been getting and reviewing detailed benefits statements from their employers every two or three years, now is the time to do that -- even if they are retired. These details should include how much they will collect in benefits and how the pension is calculated.

Congress may pass legislation at some point that requires employers to provide workers with pension benefit statements at least once every three years. These statements would have to include how the benefits are calculated.

Make sure that your parents don't throw away employment records. It's up to you and your parents to make sure things are correct when it comes to the math; employers don't have as large an incentive to get the calculations right as your parents do. Furthermore, corporate cutbacks have pushed many people into early retirement -- which complicates calculations. If your parents were among those who left jobs early, it's important to confirm what they took with them.