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Hello group!

I have recently retired from a large corporation and was offered either a monthly pension payment or a one-time lump sum amount. I selected the lump sum option.

My retirement date was June 30 and I made my selection for the lump sum payment and submitted the required paperwork in early June. All paperwork and processing is handled by a third party (I will call them XYZ) and all conversations related to this process were on recorded lines. I was assigned a "retirement specialist" who would assist me in every step in this process to insure no delays or issues came up. I was assured that the entire process to receive payment would take about six weeks from the time I applied, or no later than the end of July.

The value of the lump sum ($600k) was calculated based on my retirement date of June 30 but the payment was not received by me until the end of September. During this time, there were several delays due to wrong forms requested of me by XYZ, a new "retirement specialist" being assigned to me, and just general poor management at XYZ. I was given several payment dates but each time that date arrived, the payment date was delayed again.

I have requested from both my former employer and XYZ that interest be paid to me on the amount from my June 30 retirement date and the end of September when the check was finally issued. This delay in payment amounts to an interest free loan that I have given to the program. Both my former employer and XYZ have denied this request saying that payments any amounts in excess of the stated values is not allowed.

In other words using an extreme example, they do not have to ever pay the lump sum to the employee as there is no incentive for either XYZ or my former employer to handle these payments on a timely basis. The incentive for them is to delay payments as long as possible.

My question to the group is not to debate the merits of a lump sum versus a monthly annuity payment but what course of action I might take to recover the diminished value of my payment (three months of interest calculated using the same rates as the lump sum at a minimum, about $6k)

I do not know of any other former employees that have opted for a similar lump sum so I cannot comment on processing times that others may have experienced.

Thank you all for your help.

Member Summary
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I would hate to calculate that tax bill come March.

BradisBrad (Oct. 15, 2012 @ 9:47p) |

ERISA provides a claims process to help participants avoid the need to hire an attorney to resolve benefits claims. If y... (more)

HighTechnology (Oct. 15, 2012 @ 9:59p) |

Thank you for the suggestion! I will try this and at the same time I will be searching for legal help too.

With the in... (more)

couponking1953 (Oct. 16, 2012 @ 6:34a) |

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Post the name of your company. If they are publicly traded there are many of us who would like to go short on them before they go Enron.

Additionally, start preparing for the eventuality that you may receive nothing. This way, if they do pull an Enron, you won't be hurt as bad because it won't be a surprise. And if they do eventually pay you and all you lost was 3 months of interest at 0.01%, then you'll be so relieved you got something, you won't be mad about the lost interest.

Sounds like an unreasonable amount of time to make a payment.

I'd remembered seeing something along these lines with respect to USAir... here's the link.

Bring on the lawyers!

ubermichaelthomas said:   Post the name of your company. If they are publicly traded there are many of us who would like to go short on them before they go Enron.

Additionally, start preparing for the eventuality that you may receive nothing. This way, if they do pull an Enron, you won't be hurt as bad because it won't be a surprise. And if they do eventually pay you and all you lost was 3 months of interest at 0.01%, then you'll be so relieved you got something, you won't be mad about the lost interest.


OP seems to indicate that he got paid. He's looking for lost interest due to the delay in payment.

parmenides said:   ubermichaelthomas said:   Post the name of your company. If they are publicly traded there are many of us who would like to go short on them before they go Enron.

Additionally, start preparing for the eventuality that you may receive nothing. This way, if they do pull an Enron, you won't be hurt as bad because it won't be a surprise. And if they do eventually pay you and all you lost was 3 months of interest at 0.01%, then you'll be so relieved you got something, you won't be mad about the lost interest.


OP seems to indicate that he got paid. He's looking for lost interest due to the delay in payment.


Good catch. The lack of paragraph breaks and inclusion of irrelevant info made it hard to parse. Too bad OP didn't make it simple:

"I opted for the one-lump sum pension payout from my former employer, however they screwed me around for 3 months before eventually paying me. Is there any recourse for me to pursue in the lost opportunity cost over those 3 months? I believe I am entitled to $X based on current market rates for CDs which I eventually placed my money into."

couponking1953 said:   Hello group!

the payment was not received by me until the end of September.

Correct me if I'm wrong, but you did receive the payment? It was simply delayed a month or so? And you wish to collect the lost interest?

How much interest do you personally believe was lost?

"The lack of paragraph breaks and inclusion of irrelevant info made it hard to parse. Too bad OP didn't make it simple":

You are correct. Posted update. Hopefully simpler. Thank you.

Could be worse... I left my job at the end of March and didn't receive the lump sum (rollover to IRA) until Sept 1st, of course with no extra interest paid for that time.

3 months is not an unreasonable amount of time to process a $600k lump sum payment.

Move on.

3 months is a long time to write a check. I do not care if the company is shopping the pension around to various buyers so it can make money. At one percent interest which is low, that is $500 a month. At 3 percent interest, that is $1500 a month. What do you think company xyz is doing? It bought the pension and is making money on the spread. I would give them 1 month free tops.

Bizatch said:   3 months is not an unreasonable amount of time to process a $600k lump sum payment.

Move on.

Court awards interest on delayed lump sum payment.

Summary: Barring "administrative necessity", a delay beyond 30 days from the annuity start date is unreasonable, and that extra delay is subject to interest. I'd pursue collecting this unpaid interest.

ETA: Parmenides mentions the case in his above post.

Additionally by pursing legal action you are giving a benefit to all current employees who may later receive faster processing times due to new leadership mandates following your lawsuit.

glxpass said:   Bizatch said:   3 months is not an unreasonable amount of time to process a $600k lump sum payment.

Move on.

Court awards interest on delayed lump sum payment.

Summary: Barring "administrative necessity", a delay beyond 30 days from the annuity start date is unreasonable, and that extra delay is subject to interest. I'd pursue collecting this unpaid interest.


See if sending them the court case makes them change their mind. If not, I might also hint at a class action. I can't believe you would be the first person this has happened to.

I am troubled, however, by who has to pay for this. The payments should not come out of the pension plan assets, it should come from the fiduciaries pockets. They are the ones that took too long. I doubt the pension plan is benefiting from holding onto the money.

You need to understand if your payment was delayed because you completed a form incorrectly, odds are they do not owe you interest. Administrative delay is usually the only case where interest is applied to your payment.

At 1% interest for the additional 2 months it took, that is $1000. You got over $600,000. Cash the check and move on. Not worth the lawyer fees to fight for $1000.

bookreader54321 said:   At 1% interest for the additional 2 months it took, that is $1000. You got over $600,000. Cash the check and move on. Not worth the lawyer fees to fight for $1000.


and that is exactly what they are counting on.

OP, what is the name of the company? Not naming them in only encouraging them to do it again and again.

bookreader54321 said:   At 1% interest for the additional 2 months it took, that is $1000. You got over $600,000. Cash the check and move on. Not worth the lawyer fees to fight for $1000.

But he is retired, what else does he have to do?

rhino850 said:   bookreader54321 said:   At 1% interest for the additional 2 months it took, that is $1000. You got over $600,000. Cash the check and move on. Not worth the lawyer fees to fight for $1000.

But he is retired, what else does he have to do?


Small claims court?

glxpass said:   Bizatch said:   3 months is not an unreasonable amount of time to process a $600k lump sum payment.

Move on.

Court awards interest on delayed lump sum payment.

Summary: Barring "administrative necessity", a delay beyond 30 days from the annuity start date is unreasonable, and that extra delay is subject to interest. I'd pursue collecting this unpaid interest.

ETA: Parmenides mentions the case in his above post.


OP, can you clarify if they were untimely or there were multiple failures on their end AND your end? You mentioned requesting the wrong forms, etc.

So the payout of $600k, did you pass forms back/forth for three months, and the payout remained the $600k or was your account active and increasing and they're refusing the additional interest?

Those basturds must have put it in a 3 month ALLY CD.

es4life said:   You need to understand if your payment was delayed because you completed a form incorrectly, odds are they do not owe you interest. Administrative delay is usually the only case where interest is applied to your payment.
The firm processing the payment assigned a "retirement specialist" to assist with completing the forms and submitting the proper forms and documents with proper signatures. All forms that I completed were at their request. All forms were completed with my "retirement specialist" on a recorded line. When they discovered the forms that they requested were the wrong ones, they admitted their error. The incomplete forms were discovered in late June, before I was retired and the correct forms and signatures were resubmitted via certified overnight mail immediately.

ThiftySpender said:   glxpass said:   Bizatch said:   3 months is not an unreasonable amount of time to process a $600k lump sum payment.

Move on.

Court awards interest on delayed lump sum payment.

Summary: Barring "administrative necessity", a delay beyond 30 days from the annuity start date is unreasonable, and that extra delay is subject to interest. I'd pursue collecting this unpaid interest.


See if sending them the court case makes them change their mind. If not, I might also hint at a class action. I can't believe you would be the first person this has happened to.

I am troubled, however, by who has to pay for this. The payments should not come out of the pension plan assets, it should come from the fiduciaries pockets. They are the ones that took too long. I doubt the pension plan is benefiting from holding onto the money.


I found this case about three weeks ago and forwarded to my previous employer for their review. My HR rep assured me that my case will be reviewed and I would get a reply. that was three weeks ago with no update from them. Thanks again for the help.

Al3xK said:   glxpass said:   Bizatch said:   3 months is not an unreasonable amount of time to process a $600k lump sum payment.

Move on.

Court awards interest on delayed lump sum payment.

Summary: Barring "administrative necessity", a delay beyond 30 days from the annuity start date is unreasonable, and that extra delay is subject to interest. I'd pursue collecting this unpaid interest.

ETA: Parmenides mentions the case in his above post.


OP, can you clarify if they were untimely or there were multiple failures on their end AND your end? You mentioned requesting the wrong forms, etc.

So the payout of $600k, did you pass forms back/forth for three months, and the payout remained the $600k or was your account active and increasing and they're refusing the additional interest?


Failures were on their end. All forms were completed as requested by the processing company. I told them at the start of the process, I only do this once but this is their job so they should know what is required. I completed all forms, line by line, over the phone with my "retirement specialist" to eliminate any delays due to missing information.

It should not have been that hard. Check a box, sign the form, have wife sign form, have signatures notarized, mail.

The payout amount was confirmed in early June and the final amount that was paid at end of September were the same amount.

Bizatch said:   3 months is not an unreasonable amount of time to process a $600k lump sum payment.

Move on.
Loan me $600,000 and I'll pay it back in 3 months.

bookreader54321 said:   At 1% interest for the additional 2 months it took, that is $1000. You got over $600,000. Cash the check and move on. Not worth the lawyer fees to fight for $1000.Money is fungible. If you were overcharged by $1000 at the grocery store, would you complain?

Put things in perspective for those who said move on.

You go to the bank to withdraw $6010 and the cashier gives you $6000 and says move on buddy! You have $6000 in your hands.

Find a lawyer who will work for under 500 dollars per hour and ask for 1 hour of effort. Perhaps learning to handle your lump sum distribution may be more profitably time spent

xfmpcx said:   3 months is a long time to write a check. I do not care if the company is shopping the pension around to various buyers so it can make money. At one percent interest which is low, that is $500 a month. At 3 percent interest, that is $1500 a month. What do you think company xyz is doing? It bought the pension and is making money on the spread. I would give them 1 month free tops.

I am very much in your favor. Pension plans pay 3% annual credit these days. That's $18K a year, or $4.5K per quarter. That's A LOT of money.

But then again, who cares if it were $100. For someone, $100 might be a alot.

Sue the bastards.

bookreader54321 said:   At 1% interest for the additional 2 months it took, that is $1000. You got over $600,000. Cash the check and move on. Not worth the lawyer fees to fight for $1000.

That's precisely the type of mentality that rewards bad behavior. Let's say they do these to every employee. Let's say they handle 1000 people per year. Now we are talking $1MM.

Who knows, maybe this "processor" is actually handling this for 100K people. Who knows maybe they earn 3% on their float.

Now we are talking about $300M / year scam. I am not saying it is that big. But I would bet that it is bigger than $1MM a year.

Sue the bastards.

I'm curious. What would have been your monthly pension if you didn't take the lump sum? I also hope the lump sum is some sort of tax deferred payment.

burgerwars said:   I'm curious. What would have been your monthly pension if you didn't take the lump sum? I also hope the lump sum is some sort of tax deferred payment.

I would hate to calculate that tax bill come March.

couponking1953 said:   I found this case about three weeks ago and forwarded to my previous employer for their review. My HR rep assured me that my case will be reviewed and I would get a reply. that was three weeks ago with no update from them. Thanks again for the help.

ERISA provides a claims process to help participants avoid the need to hire an attorney to resolve benefits claims. If you want to pursue this inexpensively, get a copy of the Summary Plan Description (SPD) and look for the ERISA claims process. Usually that involves submitting a claim in writing to the Plan Administrator at an address listed in the SPD. This is a process that will require the plan fiduciaries (such as a benefits committee) to consider your claim and act accordingly.

I would suggest you submit a letter to the Plan Adminstrator at the address for benefit claims listed in the SPD, explain the facts, including the forms that needed to be resubmited and the dates they were submitted (and be specific as to why) and request that they pay interest on the basis that the administrative delay was not your fault. Keep in mind that many plans have established procedures for administrative delay, and some plans pay interest on even small delays but many do not. The fact that you submitted everything correctly and on a timely basis, and the retirement specialist's error caused the delay may help you since this was a one-off set of circumstances. Above all, be factual but not overly forceful.

HighTechnology said:   couponking1953 said:   I found this case about three weeks ago and forwarded to my previous employer for their review. My HR rep assured me that my case will be reviewed and I would get a reply. that was three weeks ago with no update from them. Thanks again for the help.

ERISA provides a claims process to help participants avoid the need to hire an attorney to resolve benefits claims. If you want to pursue this inexpensively, get a copy of the Summary Plan Description (SPD) and look for the ERISA claims process. Usually that involves submitting a claim in writing to the Plan Administrator at an address listed in the SPD. This is a process that will require the plan fiduciaries (such as a benefits committee) to consider your claim and act accordingly.

I would suggest you submit a letter to the Plan Adminstrator at the address for benefit claims listed in the SPD, explain the facts, including the forms that needed to be resubmited and the dates they were submitted (and be specific as to why) and request that they pay interest on the basis that the administrative delay was not your fault. Keep in mind that many plans have established procedures for administrative delay, and some plans pay interest on even small delays but many do not. The fact that you submitted everything correctly and on a timely basis, and the retirement specialist's error caused the delay may help you since this was a one-off set of circumstances. Above all, be factual but not overly forceful.


Thank you for the suggestion! I will try this and at the same time I will be searching for legal help too.

With the increased number of companies offering lump sum payments as an option for retirement, the ability to abuse the employees selecting this option exists. There should be some protection in place to prevent delays like this from becoming widespread practice.

I will follow with a reply once this has been resolved one way or another.

Thanks to all that responded!



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