Has anyone dealt with the situation where the actuarial value of the remaining distributions to a DB plan participant is not sufficient to recoup an overpayment? Our participant has been overpaid by almost $30k. The actuarial value of the remaining distributions is only enough cover about half of that.
I know EPCRS generally permits a fiduciary to recoup overpayments by reducing future benefit payments, but does this include reducing them to $0? If not, any thoughts on where the floor is?
Our options seem to be either: (1) start paying the correct benefit amount and try to recover the $30k from the participant, or (2) cease paying benefits altogether and try to recover the $16k from the participant.
Thoughts?
Full Version: Overpayment in DB Plan
QUOTE (BTG @ Jun 12 2009, 12:29 PM) 
Has anyone dealt with the situation where the actuarial value of the remaining distributions to a DB plan participant is not sufficient to recoup an overpayment? Our participant has been overpaid by almost $30k. The actuarial value of the remaining distributions is only enough cover about half of that.
I know EPCRS generally permits a fiduciary to recoup overpayments by reducing future benefit payments, but does this include reducing them to $0? If not, any thoughts on where the floor is?
Our options seem to be either: (1) start paying the correct benefit amount and try to recover the $30k from the participant, or (2) cease paying benefits altogether and try to recover the $16k from the participant.
Thoughts?
I know EPCRS generally permits a fiduciary to recoup overpayments by reducing future benefit payments, but does this include reducing them to $0? If not, any thoughts on where the floor is?
Our options seem to be either: (1) start paying the correct benefit amount and try to recover the $30k from the participant, or (2) cease paying benefits altogether and try to recover the $16k from the participant.
Thoughts?
Another option might be to contact the participant and explain that either he/she can pay back the 30K and continue getting monthly payments, or pay back the 16K and stop all monthly payments.
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