By: David I. Gensler, Enrolled Actuary
An error is made and an employee’s monthly benefit is overstated. The employee relies on that information and decides to retire, rather than continue working. The error is uncovered. How does this get fixed (if indeed, it gets fixed at all)?
When a pension plan overpays an employee’s monthly benefit, many plans believe that as a matter of fiduciary duty, that they are required to seek repayment of those benefits, with interest. In a recent lawsuit (Lebahn v. Owens), the courts agreed, but not necessarily for the reasons that you might think.