PONTIAC (WWJ) – Pontiac retirees who were accidentally overpaid may have to give back that money. But an activist group says they shouldn’t have to cough up the cash.

The accounting mistake meant a minor bump in money for about half of Pontiac’s retirees — some were paid more than $2,300 for a total of over $650,000 and that’s why the Pension Board voted to recoup the money, saying state law requires that the money be paid back.

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On average pensioners were paid $1000 over 16 months – roughly $62 a month.

But that doesn’t have to be the case according to Nancy Hwa with the nonprofit Pension Rights Center.

“We want people to know what their rights are because we want them to have the money that they earned in retirement and we don’t think that they should pay for the mistakes made by the plan,” said Hwa.

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Hwa says a new rule instituted by the IRS “basically clarifies that companies don’t have to – or plans don’t have to recoup the money from retirees – there are other options they can explore.”

Hwa says that pensioners could also file for a hardship status to avoid having to pay a lump sum repayment should that be necessary.

The $500 million pension plan fund could absorb the loss if the over-payments were forgiven — and since the fund is 150 percent funded – it means there is way more money than is actually needed.

Find more information from Pension Rights [here].

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