Pension panic: Holland retiree told to repay $38K

Ottawa County

HOLLAND, Mich. (WOOD) — When Adeline Reed received a letter from her pension fund telling her she’d been overpaid for nearly a decade, she was shocked.

“I didn’t believe it,” said Reed, 74, of Holland.

According to the letter from the Kraft Heinz Retirement and Savings Plan Center, Reed’s monthly payment of $724 was supposed to drop by $350 when she turned 65.

“It was determined that an error was made in distributing your pension benefit,” read the letter. “We recently confirmed that your supplemental benefit did not stop at age 65 and therefore you have received benefits that are not due to you. This resulted in an overpayment to you in the amount of $38,150…. which you are obligated to repay to the Plan.”

Reed retired in 2002 from the Holland Lifesavers Plant, which shut down and moved the work to Canada.

“I thought they were miscalculating or something, because the other letter that I have, dated 2008, was saying ‘for life’, so I wasn’t worrying about nothing like this,” she said. This is a shock.”

The 2008 letter, which she received just two months before her 65th birthday, verified that she was getting $724.56 a month.

“Your benefits began on November 1, 2002 and will continue throughout your lifetime,” read the letter from Kraft, dated Sept. 11, 2008.

According to the letter Reed recently received from the company, now called Kraft Heinz, the fund only discovered the overpayment “during a recent review.”

The letter went on to explain that the fund – by law – must ensure that all covered participants receive only the benefits to which they are entitled.

“In the event of an overpayment, the Plan is required to recover the amount of the overpayment ($38,150),” the letter says.

Kraft Heinz went on to note that if it doesn’t recover the amount it could lose its tax status, thus impacting all beneficiaries.

Reed, who doesn’t have the money, panicked.

“I don’t have it,” she told Target 8. “I live on just Social Security plus my pension.”

Elder Law of Michigan, a non-profit consumer agency that helps people with pension problems in six states, advised Reed to file a “hardship waiver” with the fund.

An attorney with the non-profit consumer agency pointed out that the pension fund could choose to repay the nearly $40,000 itself.

“They don’t have to collect from the participant,” said Sandra Wisnewski.”They can make the plan whole by themselves by just putting the money back into the fund.” 

But the law allows the pension fund to decide who should pay the money back, and it’s almost always the retiree who’s stuck with the bill.

“Unfortunately, the law is not in the participant’s favor,” said Wisnewski.

Wisnewski advises anyone in Reed’s position to call the Pension Rights Center for help at 888.420.6550.

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