Nfld. & Labrador

Pension overpayments: Ross Wiseman says government will not impose undue hardships

An internal audit has discovered the Newfoundland and Labrador government overpaid nearly $1 million to hundreds of retirees.

In extreme cases, some pensioners were overpaid by up to $50,000

Ross Wiseman, minister of finance and president of treasury board, revealed Wednesday that nearly $1 million in pension benefit overpayments were made to just under 430 retirees. (CBC)

Hundreds of retirees in Newfoundland and Labrador are being hit with a double-whammy to their pocketbooks this week, as Finance Minister Ross Wiseman revealed that almost $1 million in overpayments to former public servants. 

Nearly 430 of them — or in some cases a spouse in receipt of a survivor's pension — are finding out that their pension income will be reduced, and that they will also have to repay money they received in error over the past decade.

In extreme cases, some pensioners received more than $50,000 in overpayments.

However, the bulk of the cases involve about $300.

Wiseman said the errors involve 401 retired teachers, and 26 public service pensioners.

An audit dating back 20 years revealed the errors, but the government plans to collect amounts paid in error dating back just 10 years because of a statute of limitations, said Wiseman.

Wiseman said those affected are being contacted by telephone this week, and formal letters will follow.

Wiseman issued an apology, acknowledging that in some cases, the measures to rectify the situation could place "extreme hardship" on some pensioners.

But he emphasized that officials will be sensitive to the circumstances of each person, and will tailor a repayment plan to ensure "it doesn't become something that is devastating to them."

He said government will follow a standard practice of allowing the money to be paid back over a period that is twice as long as the period over which the overpayments occurred.

As an added measure, he said repayments will not exceed 15 per cent of a person's income.

He stressed that further measures could be taken to minimize the financial impact.

"We will be extremely sensitive," Wiseman stated.

Pension payroll system 'old, antiquated'

In the case of the teachers' pension plan, Wiseman said some retirees received indexing to their pensions after age 65 to which they were not entitled.

In some cases, individual overpayments totalled more than $12,000.

As for public pensioners, Wiseman explained that adjustments were not made after the provincial pension was integrated with the Canada Pension Plan at 65.

Wiseman said these changes had to be keyed in manually under an "old and antiquated" pension payroll system, but never occurred.

In all, just under 40 pensioners will have to pay back more than $5,000.
NDP Leader Earle McCurdy said the provincial government should consider "some forgiveness" in its efforts to recover nearly $1 million in overpayments to hundreds of pensioners over the past decade. (CBC)

When asked why the government couldn't write off the money, since it was not the fault of the pensioners, Wiseman said the overpayment came out of the pension plan, and those who participate in that plan "have an interest in making sure the plan is kept whole and any financial obligations to the plan are responded to."

The plan is comprised of money contributed by the government and pension plan members.

A review has taken place and further audit reports and checklists have been developed to avoid the possibility of these errors occurring in the future, Wiseman added.

He said there have been improvements made to a new payroll program.

McCurdy asks for 'some forgiveness'

Meanwhile, NDP Leader Earle McCurdy is calling on the provincial government to closely consult with the associations that represent the public service and teacher pension plans.

He said there should be "some degree" of payback in order to be fair to the pension plan members, but also asked that the government consider "some forgiveness."

"If you look at the size of these overall pension plans, those are not significant sums in the scheme of things," McCurdy stated.

He said no one should be plunged into poverty over what he called a clerical error.

About the Author

Terry Roberts is a journalist with CBC's bureau in St. John's.