In a previous article, “Unfair Pension Takebacks,” we discussed what happens when pension plans mistakenly pay retirees the wrong benefit amounts for months or years before discovering their mistake. Many clients contact us when, out of the blue, they receive a letter from the pension fund telling them that their monthly benefits will be cut so that the plan can recover the overpaid amount, and sometimes also demanding that the retiree pay back a large lump sum as well. Many retirees from Illinois received letters like this from their union pension fund, Sheet Metal Workers Local 73, this past summer, and contacted the Illinois Pension Assistance Project for help. We worked on many of these cases throughout the summer and fall of 2013.
Just a few months ago, a 75-year old retired mechanic who was in Local 73 called us because he had recently received a similar letter. His letter stated that, approximately 20 years ago, he had received four checks of about $540 each that he should not have received. The pension fund now wanted him to pay back this $2,000 and also wanted him to pay an additional $7,800 in interest for the 20 years since he had allegedly received this money. The letter further explained that the pension fund would therefore be lowering his pension by over $125 each month to recover this amount – which totaled $10,000 when the interest was added to the “overpayment.”
Fortunately for us and for the client, he had kept meticulous records over the years. Because of this, we were able to show that the pension fund had made yet another mistake: He had never actually received any pension funds from the plan in 1993 and 1994!! The fund had sent him checks that he was able to prove he had returned uncashed. We filed an appeal on our client’s behalf and proved that he had never been overpaid. Once the fund reviewed our appeal and evidence, it agreed that our client did not owe any money, restored his monthly pension to the correct amount, and sent him a check refunding the amount it had already withheld.
This client was lucky that the documents he had kept over the years allowed us to dispute the fund’s obvious error. And he was lucky that the Illinois Pension Assistance Project was able to file an effective appeal on his behalf free of charge.
If you would like to request assistance from the Illinois Pension Assistance Project or the New England Pension Assistance Project, please contact us directly by calling 888-425-6067.