Pensions board asks legislature to look at overpayment loophole -- Gazette.Net


Lawmakers might consider legislation next year that would give the state’s pension system more power to recoup money in case of accidental overpayments.

Representatives of the Maryland State Retirement & Pension System addressed the General Assembly’s Joint Committee on Pensions on Wednesday, offering requests for legislation from the system’s board of trustees.

One proposal would allow the system to collect money paid in error to a retiree, even after the retiree dies, by garnishing benefit payments made to a beneficiary.

The agency recently faced a situation in which a retiree was paid more than he was entitled to, but the error wasn’t discovered until after his death, R. Dean Kenderdine, the system’s executive director, told lawmakers.

When the agency tried to get the money back, it found that only the retiree’s benefits could be offset, not those of the surviving beneficiary, Kenderdine said.

The board is requesting that the law be amended accordingly.

The proposal drew some immediate concern from lawmakers such as Del. Susan L.M. Aumann (R-Dist. 42) of Timonium, who said she appreciated the thinking behind it, but felt there needed to be a clear threshold. The survivor of a deceased retiree could end up on the hook for decades’ worth of overpayment but have little or no other income to live on, Aumann said.

Sen. David R. Brinkley (R-Dist. 4) of New Market agreed that there should be a clear statute of limitations.

Kenderdine said he would discuss the concerns with the board.

“Obviously, reasonable judgment needs to prevail,” he said.

The committee will make a full decision on whether to submit the proposed legislation to the full legislature in December.