September Deadline Set for Refiling Pension Overpayment Suit

August 26, 2010 ( – ING Investment Plan Services has until September 28, 2010, to refile its lawsuit against a Wheaton, Illinois, woman who ING claims has refused to repay $143,000 in a mistaken pension overpayment.

U.S. District Judge Blanche M. Manning of the U.S. District Court for the Northern District of Illinois ordered that if a new suit against defendant Donna M. Barrington is not filed under the Employee Retirement Income Security Act (ERISA) by that date, Manning’s order throwing out ING’s original case filed under Illinois state law will become permanent.  The court ruled that the state law claims against Barrington in the original suit would be pre-empted by ERISA.

However, because the two sides have yet to argue whether ERISA even permits ING to recoup the mistaken payment from Barrington, made as a former participant in the Avaya, Inc. Pension Plan for Salaried Employees (APPSE), Manning decided to let the matter move forward with the filing of a revised complaint, “…given the remaining uncertainty.”

According to court documents, Barrington elected to receive a lump-sum benefit payment from the APPSE when she retired from Avaya. APPSE made the $186,634 payout to Barrington’s Fidelity Investments account on August 16, 2004, according to the records.

After a 2007 audit, ING later discovered Barrington had been overpaid by $143,568.82. That prompted ING to reimburse APPSE for that amount, in turn, demand reimbursement from Barrington and eventually file suit. “Barrington has been unjustly enriched by receipt of the mistaken overpayment,” the suit charged. “Barrington is holding money from the Pension Plan that does not belong to her.”

According to the court records, the case bogged down for a period of months while ING tried to serve her with legal papers, during court-ordered postponements to give Barrington time to hire a lawyer and during at least one hearing when she failed to show up in court at all.

The latest court ruling is here.