Pension error leaves woman with $49K bill

Former teacher had been overpaid for years; state wants money back

When Katherine Sweeney first heard from the New York State Teachers Retirement System that her pension was being reduced, she thought it was a prank — and she told them to send her the news in writing.

“My first reaction to this call was that it was a ‘crank call,’” Sweeney explained in an email about the notice she received last July. “I said that I did not understand the problem and I would like a letter explaining this situation. Within a few days, I received a letter.”

What had happened, Sweeney learned, was the retirement system, known

as NYSTRS, had miscalculated her pension payment when she retired from her job as a special education teacher from the Richfield Springs school district in Otsego County in 2004. She lives in the hamlet of Schuyler Lake, about 10 minutes northwest of Cooperstown.

Sweeney has been collecting the benefit since then. She was told that she owed the pension system $49,000 — and that her pension payment was going to be reduced.

By January, Sweeney, 75, said her monthly pension check shrunk by more than $500, dropping from $2,671 to $2,147.

And there doesn’t appear to be anything she can do about it.

Her case may be unusual but it’s not unheard-of, say pension experts. Calculating a pension can be complicated given the variables that come into play, which appears to have been the case here.

During a 30-year public sector career, Sweeney had worked in social services before becoming a teacher, and her earlier credits were switched over from the state Employee Retirement System to NYSTRS.

Officials from the system wouldn’t comment on details of the case, citing privacy rules. “Personal privacy laws prohibit us from discussing the specifics of this case, but we acknowledge the error and regret that it was not identified and corrected earlier,” NYSTRS spokesman John Cardillo said in an email. “However, as fiduciaries of the fund, we are required by law to recover the overpayment. Errors like this are extremely rare.”

Sweeney said she was told the snag appeared to have come when NYSTRS erroneously over-weighted the one-time $20,000 retirement incentive she received when she left the district.

Sweeney said the error was detected during a check of her pension benefits that the system sometimes makes, to see if retirees have more, not less, money coming.

“They were terribly sorry because it was completely their fault,” Sweeney recalls being told.

Sweeney spent more than $5,000 in legal fees to have a lawyer write to NYSTRS and discuss the matter with them. But it didn’t change the situation. “They said that if money is owed to New York state, they have an obligation to retrieve it,” she noted.

Others agreed. One longtime observer who works with state employees said such mistakes occasionally occur and there’s little recourse in court, unless the repayment plan is arbitrary and capricious.

Pensions also can be adjusted for other public-sector retirees who are in the separate State and Local Retirement Systems.

“Because of the many variables that are often involved in verifying service and salary details with a retiree’s former employer(s), finalizing the retirement benefit amount can take some time,” said Tania Lopez, a spokeswoman for the state comptroller’s office.

“In most instances, the pension payment is initially based on the salary and service information we have on file. However, the payment may be adjusted after we receive and process final payroll information, such as eligible lump sum payments or lagged regular earnings from the employer(s).”

Sweeney said she and her husband, a retired dairy farmer, will somehow survive. They operate a greenhouse on what was their farm. But her husband is 77 and has heart problems that are making it difficult to work in the greenhouse business.

“It’s difficult. I planned on that,” she said of her pension. “The price of everything isn’t going down.”