Retirement Fund overpaid retiree $300K

The Settlement Fund conducted a manual audit of all of the underpayment and overpayment member accounts identified and found out that there were 131 members who received a total of $421,599 in overpayment, including one who got $300,000.

Settlement Fund in-house counsel Nicole Torres said according to the updated results of their audit, 21 other members were underpaid in a total amount of $57,751, with the most was underpaid $1,200.

Torres discussed the audit on overpayment and underpayment in her presentation during last week’s status conference in Betty Johnson’s class action held in the U.S. District Court for the NMI.

The lawyer said the Settlement Fund Trustee’s previous report for the combined fourth quarter fiscal year 2014 and first quarter FY 2015, there were 276 members who received a total of $1,493,809, while 124 members were underpaid in the total amount of $330,526.

Torres said the audit was done to identify membership files with potential issues.

She said the benefits audit software identified 399 membership files with potential issues.

Torres said the manual review on member files has a five-step process.

She said after review is completed, member files with no issues are closed out.

Torres said 247 files did not have issues, while 152 files had issues.

“We notified them if there are issues,” she said, adding that they then make adverse decision, explain the issue, and give them opportunity to respond or settle.

In response to U.S. District Court for the NMI designated Judge Frances Tydingco-Gatewood’s question, Torres disclosed that they pay lump sum to those who got underpayment.

Torres said $300,000 is the most overpayment.

Torres said it took three weeks to go through the five-way review process.

“We made a huge progress, Torres said.

She said they prioritized paying those having underpayment, who also get interest.

Settlement Fund Trustee Joyce Tang said they found errors in various numbers factored into the calculation affecting the benefit amounts.

On underpayment, Tang in her report said some members’ benefits were improperly computed, resulting in benefit underpayments.

The audit determined that 247 of the member accounts did not contain any issues and were closed out, while 152 filed had issues.

On those having issues, Tang found that the additional five-year credit was incorrectly applied to members who did not qualify for such credit.

Tang said they also found that the average annual salary for a number of files were miscalculated, resulting in overpayments.

She said a number of members improperly received Cost of Living Adjustment (COLA) without satisfying the age requirement.

Tang said some members received credited service, but their membership records do not support the amount of time in service.

On double dipping, Tang said they found that some reemployed retirees improperly received benefits and government salaries without satisfying any of the exceptions under the statute.

In some cases, Tang said, the early retirement penalty was not applied or improperly applied.

On employee contribution, Tang said some members paid the incorrect contribution rate.

On overtime/compensatory time, Tang said many members were improperly given service credit instead of vesting service credit for OT/CT hours, and/or were not eligible for such credit because they did not meet the threshold 2,080 regular hour requirement.