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Saving for Retirement

Know Where Your Pension Is?

I am trying to find out exactly what happened to my profit-sharing fund. I never received a payout and am wondering if it is too late to do anything. Do you have any advice?

I was a Wal-Mart employee from 1988 to 1995 in a store that has since closed, and I am trying to find out exactly what happened to my profit-sharing fund. I never received a payout and am wondering if it is too late to do anything about this. Do you have any advice? -- Rod Stemler, Waukegan, Ill.

We're happy to report that Rod's question has been answered -- and resolved. Kiplinger's got in touch with Wal-Mart's benefits department and Gene Stillwell, director of retirement and savings plans. Stillwell dealt with the matter personally after Rod provided the necessary information. "I can't describe how happy I am to finally have this matter settled," Rod told us.

Are you in a similar situation? Get in touch with your former employer's benefits department and request three pieces of information: the summary plan description in effect when you left the job, the current plan description (if different) and the most recent individual benefits statement.

Employers must provide that information within 30 days of your request. John Hotz, deputy director of the Pension Rights Center, recommends sending a certified letter. If you don't get a prompt response, contact the Employee Benefits Security Administration (call 866-444-3272 or go to, which is part of the Department of Labor, and ask to be connected to your regional office.


Things become more complicated for firms that no longer exist. You have to be a detective. Look up the plan administrator at FreeErisa's database of Form 5500 filings, which companies must submit regarding their retirement plans. Still no luck? FreeErisa generally charges $50 to search through older plan documents.

A cool car that's also safe

My teenage son is an exemplary student and highly responsible. So we told him that we would be willing to spend $10,000 to buy a car for his use. He has scanned the Blue Book and discovered that some of the earlier BMW Z3s fall into that price range. They apparently have a good safety record and crash-test results, and cost less to insure than other, more-conservative cars. I just can't get rid of the nagging feeling that buying a car like that for the use of an almost-17-year-old is nuts! -- John Rowland, Weaverville, N.C.

It may be nuts to buy a Z3, but insuring it would be surprisingly inexpensive. State Farm grades cars on their relative insurance costs in three categories: damage and theft, liability, and vehicle safety. The 2001 BMW Z3 earns high marks in all three, so insurance premiums are significantly lower than average for vehicles in its price range.

You can look up State Farm's vehicle insurance ratings for the 2003 to 2006 model years at its Vehicle Ratings page. To compare premiums from other insurers, go to or


Your son may be disappointed to learn that the least expensive cars to insure are much less cool. Among the 20 best-selling cars and small trucks for the 2005 and 2006 model years, the cheapest to insure are the Chrysler Town & Country minivan, Chevrolet Cobalt, Dodge Caravan and Chevrolet Impala, according to

GMAC's junk bonds

I have $21,000 invested in 7% GMAC bonds due in 2012. If General Motors were to file for bankruptcy, what impact would it have on GMAC? Are GMAC bonds safe? -- L.K., via e-mail

You can breathe a little easier holding bonds from General Motors Acceptance Corp. General Motors wants to sell a controlling stake in its financing arm to a group of buyers led by Cerberus Capital Management, a hedge fund. Cerberus has a reputation for turning around companies in financial peril.

When the deal is complete (it's expected to close in December), GMAC should escape some of the taint of GM's diminished credit rating and presumably will no longer be liable for the automaker's pension obligations. If GM were to stumble into bankruptcy, the fall wouldn't bring down GMAC directly, even though 28% of GMAC's 2005 profits come from auto loans.


For now, GMAC bonds remain on the junk heap. Standard & Poor's rates GMAC debt BB. When the sale to Cerberus goes through, SP might move GMAC one rung up the ratings ladder to BB+, its highest junk grade. Moody's, on the other hand, plans to keep its junk rating on GMAC debt, regardless of an ownership change, because of the company's close business ties to GM.

Risky BRIC funds

I'm looking for a BRIC fund. Can you help? -- W.S., Laurel Springs, N.J.

It's tough to build a BRIC portfolio because your choices are expensive and limited. BRIC stands for Brazil, Russia, India and China -- four countries that Goldman Sachs economist Dominic Wilson, who coined the acronym, believes could rank among the world's dominant economies by mid century.

Franklin Templeton will launch Templeton BRIC fund (800-632-2301) as soon as it gets regulatory approval. The fund, however, comes with a 5.75% sales charge plus annual expenses of 2.15%. Some brokers also offer Emerging Opportunities Select 1 (symbol FTEOPX), a unit investment trust run by First Trust Portfolios.


The trust holds 20 stocks (which it doesn't trade), levies a 3.95% sales charge and will terminate in two years. Schroder funds is considering starting a BRIC fund.

But any fund limited to stocks from those four countries would be plenty risky. As an alternative, consider a diversified developing-countries fund, such as no-load SSgA Emerging Markets (SSEMX; 800-647-7327). The fund invests in all emerging markets, including the BRIC countries, and charges just 1.25% annually.

A spousal IRA

I opened my Roth IRA with Vanguard in 1998 when I was single. I married in 2000 and left my job in October 2005 to be a stay-at-home mom. Do I have to shift my Roth IRA to a spousal IRA? -- Laurie Damian, Stevenson, Wash.

Good news: Not only are you smart to contribute to a spousal IRA, but you also don't need to make any changes to do it. As long as the adjusted gross income on your joint return is less than $160,000 per year, you can continue to contribute to your Vanguard Roth IRA.

You generally need earned income to contribute to a Roth IRA. But if your husband is employed, he can contribute up to $4,000 this year to a spousal Roth IRA on your behalf. Because you already have a Roth IRA with Vanguard, you don't need to open a new account.

My thanks to Tom Anderson and Steve Goldberg for their help this month.