PERAC Memo #41 - 1998: Retroactive Payments of Veteran’s Benefits in Excess of 80% Limit

PERAC MEMO #41/1998 M E M O R A N D U M TO: All Retirement Boards FROM: Robert F. Stalnaker, Executive Director RE: Retroactive Payments of Veteran’s Benefits in Excess of 80% Limit DATE: September 15, 1998 The Contributory Retirement Appeal Board has upheld the Division of Administrative Law Appeals’ decision in the case of Dargan v. PERAC , CR-97-1418. This decision is now final and this memorandum is a follow-up to PERAC memorandum #41/1997. As a result of this decision, all surviving spouses and estates of veterans who were not previously paid all or part of the $300 veteran’s benefit because they were above the 80% limitation in G.L. c. 32, § 5(2)(c) will now need to be retroactively paid. In PERAC memorandum #26/1996, pursuant to the case of Drew v. PERA , the Commission instructed the boards to only recalculate the veteran’s benefit in excess of the 80% limitation for retirees and beneficiaries receiving benefits on the day of that decision. This new decision requires a retroactive payment of unpaid veteran’s benefits to anyone who should have received all or part of the $300 veteran’s benefit regardless of whether a retiree or beneficiary was receiving benefits on the day of that decision. This new decision requires repayment regardless of the option the retiree chose. In order to implement this decision, all boards must review all beneficiaries currently in pay status to determine if they are owed retroactive benefits due to this decision. If a board is able to search all their current and past member’s records to determine eligible beneficiaries and estates, they should do so. Whether a board is able to conduct such a search or not, it is advisable for each board to publish a notice in their local newspaper to notify beneficiaries and estates of their right to apply for these retroactive benefits. A sample notice, which will be published by the Commission on Sunday, September 27, 1998 in the Boston Globe, Boston Herald, Worcester Telegram & Gazette and the Springfield Union News, is attached. M E M O R A N D U M TO: All Retirement Boards FROM: Robert F. Stalnaker, Executive Director RE: Retroactive Payments of Veteran’s Benefits in Excess of 80% Limit DATE: September 15, 1998 Upon application, retirement boards must review their records to determine whether the applicant meets the criterion of this decision and was not previously paid as a result of the decision in the Drew case. If these applicants are eligible, the board must recalculate the retirement allowance. Again, these applicants may include surviving spouses and estates regardless of the option chosen. Recalculated retirement allowances are to be submitted to the Commission for review and approval. When submitting a recalculation, include a copy of the original retirement allowance calculation and attach a completed WORKSHEET. For calculations involving retirement allowances in excess of $9,000, which will not require recalculations for any COLAs, please use the SIMPLIFIED RECALCULATION WORKSHEET. For allowances that will be effected by the application of COLAs to the recalculated allowances, use the RETROACTIVE PAYMENT WORKSHEET. In the case where both a retiree and their beneficiary died prior to April 28, 1995, a separate worksheet should be completed for both the retiree and beneficiary. A copy of each of the worksheets is enclosed. If you have questions, please contact this office. LEGAL NOTICE Any beneficiary or estate of a public employee who received a retirement allowance under G.L. c. 32 and was denied all or part of the $300 veteran’s benefit because they were above the 80% statutory limitation may be eligible for a retroactive payment. Any such beneficiary or estate should contact the retirement board for the community in which the public employee worked or contact PERAC, in writing, including the member’s name and the system from which they retired, at PERAC, Legal Notice, 5 Middlesex Ave., 3 rd Fl., Somerville, MA 02145. RETROACTIVE PAYMENT WORKSHEET To be used for allowances less than $9,000. Board ______________________Retiree or Beneficiary Name ___________________________ 1 - Year 2- Amount actually paid 3 - Amount that should have been paid 4 - Amount Underpaid 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 TOTAL COLUMN 2 - Enter the amount that the retiree or beneficiary actually received during the year. COLUMN 3 – Enter the amount that the retiree or beneficiary should have received based on the recalculation and application of a COLA to the appropriate portion of the allowance. COLUMN 4 - Enter the difference between COLUMN 2 and COLUMN 3. The total of COLUMN 4 is the amount due to the beneficiary or an estate. SIMPLIFIED RECALCULATION SHEET Board _____________________ _ Retiree or Beneficiary Name

1. Date of death _______ _______ _______ yr mo day

2. Date of benefit commencement for retiree or beneficiary _______ _______ _______ yr mo day 2-1) Period from date of benefit commencement to the date of death _______ ___ ____ _______ yr mo day Recalculated Annual Allowance Amount $ _________ Original Annual Allowance Amount $________ Difference between the old and new allowance $ _________ Multiplier $ _________ Difference $ _________ Retroactive payment $ _________ Retroactive payback calculation worksheet for retirees or beneficiaries whose allowances were greater than $9,000 at retirement . To convert the years, months and days to a multiplier to be used in determining the amount of retroactive payback: Multiplier = # of years + (# of months/12) + (# of d ays/365) Example: 21 years, 4 months and 20 days 21 + (4/12) + (20/365) = 21 + .333 + .0548 = 21.3881 multiplier To calculate the amount to be paid to the beneficiary or their estate, multiply the difference between the old and the new annual allowance by the multiplier .