Nearly 400 retired educators will see their Fulton County Schools' benefit checks reduced due to a mistake in calculations made by the district’s pension fund.
The error, resulting from a $3 million overpayment between 1998-2008, could lead to repayment from the hundreds of former employees who received too much money. About 30 former employees who got less than they should have will see a bump in pay.
Retired administrator Cynthia Lyon, who left the district in 2000, said she was surprised when she received a notice from the Fulton County Employees Pension Fund informing her that at the end of the month her $342.49 check will be cut by $275. She said the pension board didn't fully explain why or how they arrived at the new figure.
"We get this letter saying this is what you used to get and this is what you are going to get -- we're sorry," Lyon said, adding that the notice also mentioned an overpayment. "If I have to pay back 10 year's worth, that is a chunk of money. They need to show us how this came about. This is going to be devastating for some people. "
Officials with the Fulton County Employees Pension Fund, which meets Thursday at 2 p.m. in East Point, said those underpaid could earn between a penny more per month to nearly $100 more.
The error was caught recently during a quality check. Pension fund officials were trying to prepare data for an actuary to review after a software upgrade. They are trying to correct the error before it impacts their standing with the Internal Revenue Service.
"Because of the number of them, we have to report ourselves to the IRS and work with them to determine what the recoupment plan is," said Margaret Bryant, director of Fulton County School Employees Pension Fund.
The quality check compared adjustments to payments retirees were receiving from the Teachers Retirement System of Georgia and the safety net the district's plan provides. Fulton's plan compensates members for income they may have earned working overtime or as coaches. For example, if Fulton’s plan estimates a retiree’s benefit as $3,000 a month and the state’s plan says the retiree should get $2,500 based on contract salary, the Fulton plan pays the difference.
"If your [state benefit] went up by $75 dollars, your Fulton County Schools benefit should be reduced by that same adjustment,’’ Bryant said.“That didn't happen in every case.’’
The district, working with an independent audit firm, estimated a new monthly figure by calculating what the benefit should have been at retirement and then adding cost of living increases that employees were eligible for since they retired. She said she did not know how much employees would be asked to pay retroactively. Some had pay discrepancies dating as far back as 1992.
Lyon's letter from the pension board said the recoupment process "may result in either an additional reduction of future benefits, or a requirement that funds be repaid."
Bryant said they must follow the law but will try to arrange a plan that will "have the least impact possible," on members. The error has changed policy for the fund. Quality checks will be performed every six months, she added.
But retirees say that won't help them now.
Retired Fulton Schools teachers Jeffrey and Sharon Schermer said they will be hurt by this. He received a letter reducing his monthly benefit. Hers was not touched.
“I’m horrified by it all,” Sharon Schermer said. "I don't know how they will want the money back. It will greatly impact us financially."
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