NC Proposal Would Forgive Pension Overpayments

April 5, 2007 ( - A North Carolina state lawmaker has introduced a bill that would forgive $1.4 million in pension benefit overpayments to nine widows and one son of police officers as part of a system error over survivor benefits.

The measure by state Representative Robert Grady would discontinue efforts by state officials to get back the overpayments ranging from $51,027 to $295,740 mistakenly made to beneficiaries of the deceased law enforcement personnel as part of a computer glitch in 1986, according to The Raleigh News & Observer. Co-sponsor of the legislative proposal was Representative Earline W. Parmon.

Even though a spokeswoman for State Treasurer Richard Moore said some of the mistaken payments have already been returned, Grady told reporters that the state should chalk the whole issue up to a mistake and move on.  

“These women don’t have the ability to repay this money,” said Grady, according to an Associated Press report. “The retirement system should say, ‘it is our mistake,’ and write it off.” Grady said two of the widows live in his district. Repayment for one of the women, who is 87, would be impossible on her fixed income, he said.

The problem first arose with the merging of the Law Enforcement Officers’ Benefit and Retirement Fund and the state’s retirement plan for local government employees in 1986. According to the news report, the computer mistakenly identified the employees as having opted for survivor benefits so their heirs would continue getting payments after their deaths.

In reality, the employees had opted against such benefits – and received higher initial direct pension payments as a result. Because of the glitch, the relatives still received payments when the workers died, the news report said.

As required by current state law, Moore’s office has been pursuing the overpayments for a year, but Moore spokeswoman Julie White said the official supports the proposed bill.