What to do if my employer failed to suspend my pension after returning back to work and now wants 8 months of payments returned?

UPDATED: Oct 1, 2022

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What to do if my employer failed to suspend my pension after returning back to work and now wants 8 months of payments returned?

I retired early age 56 after 32 years service and start receiving pension benefits immediately. I was rehired for a perdium position 4 months after my retirement date. I started back and worked over 40 hours for 8 months while continue to receive my pension. The pension administrator audited employer and found they were not in compliance because they did not report and did not suspend my pension due to the fact that I was working over 40 hours a month. At this time I received a phone call by pension administrator asking me to pay back, in a lump sum, all last 8 months of my pension or to cut back to under 40 hours a month of work and take a 25% reduction of pension until last 8 months of payments were paid back. This will take 28 months to repay the 8 months of pension payments that should have been suspended by my employer the first month I worked over 40 hours. This seems to be an error on my employer’s part. Can they ask for this money back?

Asked on May 30, 2019 under Employment Labor Law, New York


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 3 years ago | Contributor

Yes, they can ask for it back. The law is very clear that an error does NOT let someone keep money to which they are not otherwise entitled. If, for example, you accidently sent two checks to your plumber for the same work (having forgotten you'd sent the first), he'd have to return the extra money to you--he could not legally keep it because it was your error. The same principal applies: their error does not let you keep their money.
Also, bear in mind this was not just their error anyway: you were aware you were receiving a pension while working full time. You could have reached out to them to stop the payments. And as for whether this is a hardship: the law does not recognize hardship as grounds to not repay money you owe someone, and in cases like this, I regularly see judges state that since someone received more money than they expected or to which they were entitled, they should have put the surplus aside and had it available for repayment, rather than spending/using it.

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