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Company asking me to repay my Pension payout?

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edemay1022

Junior Member
What is the name of your state (only U.S. law)? Illinois

In 2008 I was laid off of the company I worked for in Chicago, IL. As a part of my severance, I was vested and paid out a Pension Plan that was part of my benefits package. I recently got a letter in the mail from this company stating they gave me too much money and asking me to pay back the overstated amount plus interest. Can they legally collect on this in that this was their error, it has been rolled over into a Rollover IRA, and they are charging me interest for this?? Is there anything I can do about this as I do not have the funds (nor want to) pay money back for an error the company committed a few years ago (FYI its only a couple hundred dollars if that is of any relevance).
 


ShyCat

Senior Member
Can they legally collect on this in that this was their error, it has been rolled over into a Rollover IRA, and they are charging me interest for this??
Yes. Mistakes happen, and they're allowed to correct their mistake by collecting the overpaid funds. Forcing them to sue you to collect the money will only cost you more in the end as they will likely ask the court to recover court costs, attorney fees, etc. from you.

Is there anything I can do about this as I do not have the funds (nor want to) pay money back for an error the company committed a few years ago (FYI its only a couple hundred dollars if that is of any relevance).
You do have the money. It's in the Rollover IRA. If you were not entitled to all of the money that went into the Rollover IRA, that portion which was an overcontribution can (and should be) removed. Overcontributions are subject to a 6% penalty each year that it remains in the IRA.
 

antrc170

Member
The company can collect overpayments based on clerical error, however, they cannot demand that you pay interest on the amount.
 

xylene

Senior Member
I recently got a letter in the mail from this company stating they gave me too much money and asking me to pay back the overstated amount plus interest.
There is something fishy about their request with this "with interest" bit.

Ask them to send more proof of this overpayment.

No harm in stalling, see how serious they are.
 

edemay1022

Junior Member
yah i find this awfully fishy as well..

is it common that a company will wait two years on somethig like this? Why would this suddenly come up for them?

is there a specific document that i can ask to be sent to me to give itemized detail of their calculations and the calculation of what my benefits stated it should be?

Also should the company be liable for any fees it costs to withdrawl the money from the IRA if this is going to result in potential fees due to an overcontribution?

Thanks everyone for your advice
 

antrc170

Member
There isn't a document number or name per se, you just need to demand in writing that the company itemized and basically prove that they overpaid. The company might be liable for debit charges and you'd probably have to sue in order to recover. I can see a judge finding in your favor only if you can show that you had no other funds to cover the debt, and the company was not willing to accept a payment plan. Then I can understand the judge finding in your favor, otherwise, there is nothing that says that you must use those funds to pay the money back. If you choose to use that money, then you would be liable for the charges.
 

edemay1022

Junior Member
I had this reviewed by a legal contact who stated this is relativly rare in that the pension plan payout would have been verified and authorized by a plan administartor who is ultimatly liable for this overpayment. Also the fact that they are wishing to recover interest for the funds seems very odd.

To your point i can find the money outside of these funds to repay it. However, I am very much paycheck to paycheck (largely due to this companies timing in laying off my division) and it seems unfair i need to use my personal cash flow (thus causing undue stress to pay my bills) to repay their error. I feel if they distributed the wrong amount the funds should come from the same source, in which will result in penalties/ fees which the company should be liable for.

At the end of the day if the company pushes it I will lose regardless whose error this may be. I am more interested in making them prove this error to me with an explanation as to why they are requesting this after two years and why there is interest being charged.
 

Travis T

Junior Member
I recently received a similiar letter, I was laid off in 2008 as well, I wouldn't surprise me if it was from the Same C(hah!)ompany. I'm curious to see what kind of luck you have.

Mine is only in the amount of 205.xx before interest and 225.xx after interest, but I took a cash distribution of the pension plan. So technically I would need to file an amendment to my 2008 tax return for it to be accurate, am I wrong in thinking the company that made the error should cover any costs I face in doing this?
 

Jejvan

Junior Member
Really citi asking me for a repayment of pension?

Here is a company that laid off 10 of thousands of American workers still owes the government billions of tax payer money... Btw we get no relief on our tax's for helping... Yet they want me to pay them back for what they say is their mistake from '08 fishy is a understatement! This is such bad press... I personally remember seeing my statement of final payout and what I recieved was exactly online with that. So how was it wrong? Is citi going to pay the tax's or fee for me to have my 08's redone? Doubt it! To top it off they are asking for interest! Really!!! Is our country in a financial crises? Are we not going into the holidays? Doese vicram pandit need more bonus at end of year? This company is a joke and a sham that is owned more by middle east interest and fed than Americans on who's soil it Sits. As far as I'm concerned they can kiss my red white and blue butt!! I'm going to write and call every person I know and make every post I can about how crappy a company this is until they resend this junk. And yes they need to prove to me why I need to accept that they made a mistake or did they?
 

pattytx

Senior Member
jejvan, if you have a legal question, start your own thread and, in it, knock of the ranting and hysteria. Otherwise, go rant somewhere else.
 

hansgruber

Junior Member
Same issue...

Hi- I'm hoping I can get some guidance here. I received a letter in the mail from my previous employer's (Citigroup) pension plan stating they overpaid me back in October 2008. I was laid off from them and needed some extra cash to pay off some debt, so I took the lump sum.

I don't know what to do- I can't afford to repay this nor do I feel that I should pay this. Is there a statute of limitations? Can they send me to collections? I'm I legally responsible to repay?


Not trying to get sympathy here, but I just lost my mom this week to a long battle of cancer and got a little one on the way. To say finances are tight is a gross understatement.

Here's a copy of the letter:
_________________________

As the administrators for the Citigroup Pension Plan (the "Plan"), we perform periodic reviews of the benefit amounts previously paid to ensure the accuracy and completeness of all benefit payments. We regret to inform you that based on our review; we have determined that you have received an overpayment from the Plan in the amount of $1,290.83. We apologize that the payments you received were overstated and realize that the repayment of this amount will have a negative impact on you. Unfortunately, since the Plan is a tax-qualified retirement plan under the Internal Revenue Code we are required by law to correct your benefit amount and insure that only the benefit amounts owed to you under the terms of the Plan are paid.



On October 1, 2008, you elected to receive your Plan benefit in a single, lump sum payment in the amount of $3,436.48. We have determined that this amount was overstated and that your payment should have been $2,256.50, and the overpayment amount stated above represents the overpayment amount of $1,179.98 plus interest.



Since this error was no fault of your own, we would like to work with you on a repayment arrangement that is most acceptable to you. We have provided information on two repayment options for your consideration. However if there is an alternative arrangement you would like to consider, please call the Citi Benefits Center at the number below to initiate the discussion.



* One time repayment: If you would like to pay this overpayment amount in a one time payment, please send a money order, cashier's check, or certified check in the amount of $1,290.83 paid to the order of "Citigroup Pension Plan".....
The Plan does not accept personal checks for purposes of recovering overpayments,

* Monthly repayment plan: Under this alternative, you will pay back a portion of the overpayment amount each month over a designated number of months until the overpayment amount is fully recovered. You may designate a reasonable period of time, over which the repayments will occur......
 

Dillon

Senior Member
The Plan does not accept personal checks for purposes of recovering overpayments,
if me, i require a bill (not a statement) sent and signed under penalty of perjury, i mean, how do i really know this is not another of their mistakes.

its my understanding, i have already payed you, did you not get the money from the taxpayer payed bank bailout?

OR

if verified, Payback over time in the amount you desire till payed off, after all its their fault. dollar a week works for me.

also if me i would tell them, "its my policy to payback overpayment with personal checks, sorry thats my policy".

according to federal u.c.c. - payment offered and then rejected is discharged.
 
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pattytx

Senior Member
Anyone to whom one owes money can specify the means by which he will accept payment. If company wants to state money order or certified/cashier's check only, they may legally do so. Personal checks can have stop payments placed on them. Money orders and certified/cashier's checks cannot. They could require it be paid in pigs if they wanted to.

Dillon, you don't know much, do you?
 
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Country Living

Senior Member
New people - start your own thread

It's bad manners to hijack someone else's thread and this one belongs to edemay. Go start your own threads.
 

infoseeker82458

Junior Member
Same issue - additional questions

My letter states I need to repay $542.30/595.45.
What legal basis could Citi employees use for refusing to repay?
What Texas statute(s) or case(s) address private pension plan repayments?
Are lum sum distributions treated differently then monthly payments?
Is there a time limit on repayment requests? Could two years, fall outside timely review requests?
ERISA has been applied to private pension plans (Johnson v. Retirement Program Plan, 2007) - does it have any effect here?
Employees had to sign "no suit" agreements (?contract) in order to receive severance - does contract law have anything to do with this issue? Are the severance and pension payouts totally separate issues?
Laid off employees were given the option of lum sum or monthly payments; because the financial data has changed, could this allowed revisiting this option?
Does this repayment request fall under "miscalculation by administrative staff." If so, does the company have to prove it was a honest mistake? Could Citigroup have benefited from this overpayment?
Is there any basis for a class action suit, e.g., for example payment for costs incurred for refiling taxes, compensation for tax penalities incurred due to overpayment?
 

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