10-22-2010 10:56 AM - edited 10-22-2010 01:19 PM
Hi- I'm hoping I can get some guidance here. I received a letter in the mail from my previous employer's (Citigroup) pension plan stating they overpaid me back in October 2008. I was laid off from them and needed some extra cash to pay off some debt, so I took the lump sum.
I don't know what to do- I can't afford to repay this nor do I feel that I should pay this. Is there a statute of limitations? Can they send me to collections? I'm I legally responsible to repay?
Not trying to get sympathy here, but I just lost my mom this week to a long battle of cancer and got a little one on the way. Finances are tight.
As the administrators for the Citigroup Pension Plan (the "Plan"), we perform periodic reviews of the benefit amounts previously paid to ensure the accuracy and completeness of all benefit payments. We regret to inform you that based on our review; we have determined that you have received an overpayment from the Plan in the amount of $1,290.83. We apologize that the payments you received were overstated and realize that the repayment of this amount will have a negative impact on you. Unfortunately, since the Plan is a tax-qualified retirement plan under the Internal Revenue Code we are required by law to correct your benefit amount and insure that only the benefit amounts owed to you under the terms of the Plan are paid.
On October 1, 2008, you elected to receive your Plan benefit in a single, lump sum payment in the amount of $3,436.48. We have determined that this amount was overstated and that your payment should have been $2,256.50, and the overpayment amount stated above represents the overpayment amount of $1,179.98 plus interest.
Since this error was no fault of your own, we would like to work with you on a repayment arrangement that is most acceptable to you. We have provided information on two repayment options for your consideration. However if there is an alternative arrangement you would like to consider, please call the Citi Benefits Center at the number below to initiate the discussion.
10-22-2010 11:01 AM - edited 10-22-2010 11:01 AM
There is a seperate section,"Rebuilding your credit", where you can get more attention if you post this there
10-22-2010 11:10 AM
Hi OP, sorry about your mom.
You may want to check the terms of your plan. There is likely a clause somewhere that covers info like this. Per the SOL, I'm sure there is one. You'd have to look up your state's laws to confirm. Another resource that might work is contacting your state's labor department or equivalent. They'd likely know about the SOL on something like this and could give some assistance.
Can they do that? Likely, unfortunately. The terms of that plan would detail out more info. Also feel free to request from them how they came up with 1179.98 with the interest too. Make them prove their case with a simple, direct inquiry on this.
10-22-2010 11:17 AM
I hope I didn't come across as "whoa as me".... at the end of the day I know it's like what Henry Hill said in Goodfellas- "Oh your house burnt down? F*@% you, pay me."
I'm just running on empty emotionally, mentally, and financially and then Citi sends me this letter. Before I make contact with them, I wanted to get some opinions. I just Google'd "Citi Pension Plan Overpayment Letter" and I'm not the only one who's dealing with this.
I like your suggestion about having them show me the math.
10-22-2010 12:21 PM
How can they charge you interest when it is their fault?
It may be in OP's agreement, but I agree, I'd make them work hard to prove and show that. If legally allowed to collect interest, I'd ask for it off if it was a sizable amount. I'd also get into a hypothetical with them and tell them that the market has been on the decline for over two year and had the money remain, they wouldn't have earned x% in interest, but because they over paid, you made them money by not losing it in their funds. Heck, I'd figure out the rate of return on money had it stayed. If they lost, I'd offer less. Just to tick them off, I'd pay with a check anyway. But that's me. Again, that agreement may hold the key here. You can ask for that too, BTW.
10-23-2010 12:14 PM
What really bothers me too is their request the check be certified or a money order. That cost extra and is a PITA to go to the bank .
10-23-2010 08:24 PM
DId Citibank take out taxes or penalties?
How is it that 2 yrs later, they discover their error?
Seems to me that they closed out 2008 and 2009 tax year just fine....are they fishing for money?
I feel for you. DH's employer came back to us once and said they over "reimbursed" us and would be taking out something to the tune of about $500 out of the next paycheck. They would not except payments. It took quite a while for everyone to be on the same page as to where/how the error occurred. Turns out it was on their end and they did not charge us interest. Loosing $500 from the paycheck REALLY hurt! There went that paycheck! And they never explain when they under "reimburse" us. *sigh*
I agree with get more information - show me the numbers! Maybe even ask them how they closed out their books for 2008 & 2009. I'd go so far to ask them how they plan to correct the tax burden for you. They should send you an amended 1099. You only have 3 yrs to file an amended tax return. So you are on a deadline to clear this up.