Saturday, November 7, 2009

The Pension Collection Obstruction System

This is all about experiencing some very poor customer service. It has been unbelievable and leaves me shaking my head. In this age of the web with information at your finger tips, automated 800 numbers, overnight shipping, electronic banking, and on-line investing, I’ve experienced a level of service that is medieval. And while I know that the well of human stupidity is a bottomless pit, this level of service was designed to be this way (vs. natural or accidental stupidity). Yes, purposely designed to be this way; to, in my opinion, confuse, frustrate, delay and perhaps make the customer give up. By now you’re asking what service could this possibly be? It’s the process my former employer is putting me thru to collect my pension. Yes, the benefit that I earned and am fully entitled to receive.

This all started in the middle of September. My former employer hires a very large mutual fund firm to perform all of the administration services for their pension plan. I called the plan administrator directly with a question of how I could take only part of my benefit (my Cash Balance account) now and leave the remainder (my monthly benefit) to a later time. I knew this was possible because the pension plan documents state that I could withdraw my Cash Balance account upon terminating my employment. The plan administrator had to check to see if my request was possible, which he confirmed it was. I requested that they send me the forms to start the collection process. The service rep told me that it could take 3 weeks for them to prepare the forms since they had to calculate the exact amounts I was due. I asked if these amounts where the same ones I could view instantaneously on-line and he said yes but they needed to be manually verified by a pension specialist and then mailed out. Manually. Uhmmm. This firm has some of the most sophisticated computer systems in the industry and they’re going to do determine my account balance manually.

So in about 2 ½ weeks I get a package from the administrator. The package is daunting. It contains 32 pages of forms and instructions. It’s all in fine print and I needed to set aside about 2 hrs to read thru all of it a few times. My former employer was in the pension business at one time and I happened to manage the pension recordkeeping for several hundred pension clients. So I was fortunate to be able to understand all of the options and requirements. But a lay person, who doesn’t know squat about pensions, would probably need to engage a lawyer and accountant to interpret all the info.

I start filling out the forms. Yes, it’s all on paper forms; nothing is automated about this process. I can move millions with a key stroke, buy anything on-line, pay for goods instantly with Paypal, track shipments on UPS trucks, schedule payments to happen on-line, but to collect my pension I needed to send in 14 pieces of paper. And while the pension administrator can verify my ID on-line by giving my zip, birth date, social, mother maiden name, and an answer to a secret question, for this process I needed to provide a certified seal stamped copy of my birth certificate to prove who I was (a copy was not good enough). Also had to provide a copy of my marriage certificate to prove I was married (wife’s signature and ID was not good enough?) I even had to have a spousal consent form notarized so they could see that my wife approved of moving the Cash Balance funds as a lump sum to our jointly owned IRA.

But I got all the forms prepared, signed, double checked, photo copied and mailed out. I checked on-line at my employer’s pension web site to see that they had received my forms and they are checking them over. A few days later I get a call from my employers benefit center asking me to call them back. They ask me to give them a 12 digit file number when I call so they’ll know what I’m calling about. Brilliant! I need to call them back and tell them what they called me about.

So I call the benefits center, give all my ID stuff to the automated phone attendant and give it all again to the phone rep. I then give them the file number. The rep says “Oh yes, there was a question on your forms”. “The analyst wanted to know if you were just collecting your Cash Balance account or if you wanted to collect your monthly benefit too?” “Your forms didn’t provide any info about your monthly benefit.” “Well”, I said, “on two places on the forms, pages 16 and page 18, and on the letter I sent in with the forms, I specified in writing that I only wanted to collect my Cash Balance account and defer collecting my monthly benefit”. Almost wanted to end the sentence with “you idiot!”

The rep says “Oh ok, I’ll note that in the file. Your paper work is all set”. Great. Then I ask when I can expect to have the money transferred to my IRA. The rep says it could take up to 8 weeks. Eight weeks!!!!! I asked him “aren’t you just withdrawing funds from my employer’s pension fund that you manage in a trust account and moving it to my IRA account that you also manage?” I figure 2 maybe 4 computer transactions at the end of a day, a few days to verify, mail a confirm, and the money would move.

No the rep says, “We have to request the funds from your employer and then once they authorize it, they’ll sent us the money and then we can process it and deposit it in your account.” He continues that “while you requested the money for November 1st, it will probably be January 1st or perhaps February 1st”. “February 1st?” I stammer and spit out. “Yes” the rep says, “if we don’t get it posted by January 1st, then it has to wait until February 1st since we only do these on the first of the month.” Only once per month. They process several thousand transactions every day and it sure can’t be that they’re backlogged with pension withdrawal requests. He assured me I’ll be credited all due interest on my funds during this time.

So I requested my pension funds on Sept 17th and by the marvels of modern technology, I should get my money 136 days later. Brilliant!! Manual calculations, paper forms, weeks to move money, and only doing things once per month. This is all being done by two firms that pride them selves on their customer service.

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