Margaret Brown is appealing the October 23, 2007 decision of the Springfield Retirement Board denying her request for a waiver of overpayment under the provisions of G.L. c. 32, § 20(5)(c)(3) (Ex. 1). She appealed timely pursuant to G.L. c. 32, § 16(4) (Ex. 2). I heard the appeal on January 9, 2008 at the offices of the Division of Administrative Law Appeals, 98 North Washington Street, Boston.
There are nine documents in evidence (Exs. 1 - 9). I marked the joint, pre-hearing memorandum as "A" for identification. Ms. Brown and James O'Brien, Financial Auditor for the Respondent, testified; there is one tape of the hearing.
Findings of Fact
1. Margaret Brown retired effective March 15, 1996 from her position as Teacher Aide with the Springfield School Department under the provisions of G.L. c. 32, § 7 (Ex. 3).
2. Ms. Brown used to receive checks from the Springfield Retirement Board but at some point the system changed to direct deposit. Since that time, she receives an earnings statement showing a total gross payment from different amounts for annuity, COLA (cost of living adjustment), and her injured-on-duty pension (Ex. 9 and Brown, testimony).
3. The amount for annuity has remained constant at $45.84 (Brown and O'Brien, testimony).
4. Ms. Brown has received a COLA once a year. A month or so before the new COLA takes effect, the Springfield Retirement Board sends her a notice letting her know about the change (Brown, testimony).
5. In 2004, James O'Brien, Financial Auditor for the Springfield Retirement Board, discovered a slight error regarding Ms. Brown's COLA. He then recalculated her pension and in so doing, made a mistake. Her gross payment included a double payment for annuity such that she began receiving an extra $45.84 each month (Brown, testimony).
6. The extra payment continued every month until Mr. O'Brien discovered the mistake in October 2007 (O'Brien, testimony).
7. The extra payment did not show up on the earnings statement except that the total gross pay included the amount; the annuity payment on the statement continued to state that it was $45.84 (O'Brien, testimony).
8. Ms. Brown did not know that she was receiving more money than she should have (Brown, testimony).
9. In October 2007, after discovering his mistake, Mr. O'Brien telephoned Ms. Brown telling her that there was an error in her pension checks and asking her to come to his office so he could explain (Brown and O'Brien, testimony).
10. Within a few days, Ms. Brown and her husband went to the Springfield Retirement Board and met with Mr. O'Brien and the Board's Administrator and Assistant Administrator. Mr. O'Brien told Ms. Brown that he was sorry, that it was his mistake that had resulted in her getting an artificially higher pension, but that the Board would have to recoup the overpayment (Brown and O'Brien, testimony).
11. The Board employees told Ms. Brown that they would work with her in recouping the overpayment. They offered to take $250 out of her check each month and Ms. Brown said that it was a lot of money and she was not sure she could handle that amount. The Board employees said they needed to hear back from her before the next pay period. Ms. Brown did not agree to anything at that meeting (Brown and O'Brien, testimony).
12. A few days later when he had not heard back from Ms. Brown, Mr. O'Brien telephoned her and said that they were going to begin deducting $250 a month until the total amount of overpayment of $1867.05 was recouped (A and Brown and O'Brien, testimony).
13. Beginning with November 2007, the Springfield Retirement Board began reducing Ms. Brown's pension check by $250 in order to recoup the overpayment (Brown, testimony).
14. Since having her pension allowance reduced by $250, Ms. Brown and her husband have not been able to pay all their bills. She has had to stop taking certain medications because she cannot make the co-payments (Brown, testimony).
15. On October 23, 2007, the Springfield Retirement Board advised Ms. Brown's attorney of appeal rights and on October 25, 2007, Ms. Brown appealed (Exs. 1 and 2).
16. After filing the appeal, the Springfield Retirement Board offered to reduce the amount being taken each month to recoup the overpayment to $150 but Ms. Brown refused (Brown, testimony).
17. There have been other instances of Board error resulting in overpayments. No one has ever received a waiver of the overpayments. It is the policy of the Springfield Retirement Board not to grant waivers (O'Brien, testimony).
Conclusion and Order
The decision of the Springfield Retirement Board denying Ms. Brown's request for a waiver is affirmed.
General Laws, c. 32, § 20(5)(c)(2) provides, in part:
When an error exists in the records maintained by the system or anerror is made in computing a benefit and, as a result, a member or beneficiary receives from the system more or less than the member or beneficiary would have been entitled to receive had the records been correct or had the error not been made, the records or error shall be corrected and as far as practicable, and future payments shall be adjusted so that the actuarial equivalent of the pension or benefit to which the member or beneficiary was correctly entitled shall be paid…
The Springfield Retirement Board admits that it made an error in computing Ms. Brown's pension for approximately three years. The error was entirely due to the fault of Mr. O'Brien. By statute, the Board was required to correct the error and to reduce Ms. Brown's future monthly pension checks.
General Laws, c. 32, § 20(5)(c)(3) codified the so-called "Needham Bill." This section allows a retirement board to waive repayment of amounts paid in excess of those to which a member is entitled, in certain circumstances. I conclude that Ms. Brown meets all the threshold requirements for having the repayment waived. The Board, however, is under no obligation to waive repayment.
The case of Bristol County Retirement Board v. CRAB, 841 N.E.2d 274 (Mass.App.Ct. 2006) supports the Springfield Retirement Board's position. Polycarpo was employed by the Town of Dartmouth, and was a member of the Bristol County retirement system from 1958 to 1988, at which time, at age 62, she retired and began to receive a superannuation retirement allowance. In 1993, Polycarpo began working at Southeastern Mass. Education Collaborative, which at that time was a private employer. A year later, the collaborative became a State agency. Polycarpo was informed that she could either continue having social security withheld or join the State retirement system, advice that was wrong. She elected to join the State retirement system, noting that she had previously been employed by the Town of Dartmouth and was currently receiving a pension. Retirement deductions were taken until 2001 when Polycarpo decided to retire and contacted the State Board of Retirement. It was then that the Board realized she should never have been enrolled in the State retirement system and refunded to Polycarpo her accumulated deductions.
When Bristol County Retirement Board realized that Polycarpo had, while receiving retirement benefits, excess earnings under G.L. c. 32, § 91(a) and (b), it voted to recoup the excess earnings of $45,389.93. Polycarpo appealed and sought a determination that she was entitled to a waiver of recoupment. The Appeals Court questioned whether CRAB even has jurisdiction over decisions by a retirement board to grant or deny relief under § 20(5)(c)(3). The Court concluded that, assuming CRAB does have jurisdiction, such a review is limited to whether a retirement board has abused its discretion.
Ms. Brown argued that to deny her relief despite the fact that she was blameless and despite how severe the financial impact is on her, constitutes an abuse of discretion. The Springfield Retirement Board, however, never waives recoupment. Thus, I fail to see how it has abused its discretion with Ms. Brown since her situation was handled identically to all others.
Based on the foregoing, the decision of the Springfield Retirement Board denying the request for waiver of repayment is affirmed.
DIVISION OF ADMINISTRATIVE LAW APPEALS
Kimberly A. Fletcher
First Administrative Magistrate