The timing of the payout after you leave the company depends on the plan document. Check with your company's HR department or plan administrator for specifics on your plan and distribution options.
Your employer has discretion to determine when and how much the company pays into the plan. The amount allocated to each individual account is usually based on the salary level of the participant (employee). Your employer's contributions to your account, and any investment earnings, accumulate on a tax-deferred basis--the IRS will tax these benefits as part of your regular income only when you begin receiving distributions from the plan, typically after you retire or terminate employment. Most plans contain a vesting schedule, often between three and six years, during which time an employee becomes fully vested in the plan. If you were to leave the company prior to full vesting, you would forfeit all or a portion of the account's accumulated value.
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Brian, As Michelle Ash mentioned, I would also recommend contacting the HR department of the company with your pension. There is usually an election of distribution form that you will need to complete that the trustee or plan administrator can sign to authorize the distribution. Have the HR person go over the distribution options on the form as some pensions do not allow lump sum withdrawals since they are annuity based and will pay the pension money out as a lifetime stream of income instead. Pensions are structured in various ways so just be aware of what the options and tax consequences are when you request your payout.
Richard Kalina Florida Actuarial Corp. Fac@gate.net
Generally the length of time it takes to receive your pension depends on the company you work for and the pension elections you have made. Companies can set many different rules on their pension, so there's not necessarily a definitive answer for everyone. Also, the elections you make play som role in this. For example, if you've retired at an early age, it is possible to defer your pension for many years.
However, the tone of your question makes me think you may have already elected to receive your benefit. If so, most employer plans I've run across usually indicate that benefits will begin within 90 days. My advice would be to call either your Human Resources department, or the administrator of your pension (if it's a different company) and ask them. They can give you all the specifics related to you personally.
Michelle Ash http://www.wealthguards.com
Brian, I’m not sure of your age or exactly what type of plan you have.
If you have an actual pension, or defined benefit plan, if you are of the stated retirement age in the plan and are entitled to a pension benefit, it typically starts within 90 days of retirement. It is intended to typically pay a monthly benefit once you reach retirement age. Some plans allow for a lump sum payout at retirement.
If you have a 401(k) or defined contribution plan, and just used the word ‘pension’ as a general term, then you can transfer that to an IRA now, or you can take withdrawals. You will know this is what you have if you had the option to contribute money from your salary. If you take withdrawals, you will have to pay income tax. If you left the company, and you are not 55, there is an additional 10% penalty.
Either way, call HR, ask for the number of the plan administrator. The plan administrator, as the name implies, administers the plan, and will be able to explain your specific parameters.