Legal Question in Employment Law in Maryland

Re: Overpayment of lump-sum pension payout

Because you would incur stiff penalties, you have a reasonable argument that you relied on their mistake to your detriment and are not liable for repaying the money, or at least would have to be reimbursed for the penalties or have them offset against what you owe.

But I would definitely wait to see if they take any action. (At worst, I would expect another letter before anything else happens.) If they do, ask for a full accounting so you can see exactly why they think you owe them money. Then, if you agree that you do and want to pay some back, negotiate to pay back a small amount, maybe 25%, on a small monthly payment schedule - maybe $50 per month. In other words, if you agree to help, it should be as painless as possible for you.

These are complicated issues and calculations and I certainly would not take their word for it about what is owed. Also, there are statutes of limitations beyond which they could not collect the debt. That is also a complicated area but you could argue that the statute started running the minute they signed the original severance agreement (or started paying if there was no agreement). I can't tell you what the statute is, but it is likely no longer than 6 years. (That is the ERISA statute - ERISA covers employee benefit plans like severance and retirement funds.) So, if you hit 6 years from the date of the original severance agreement (around 2008), you probably have no legal obligation to pay back anything and should not agree to do so.

In the interim, also do not agree to pay anything back (even if you want to do so)until you are comfortable with whatever terms you work out. Then get it in writing. Only make the agreement by signing a written document you understand and can accept. (You might want to have an attorney look that over if the time comes, or even negotiate for you.)

Good luck.

Jeff Sheldon

The Sheldon Law Firm

[email protected]

Caveat: This is general advice only and should not be relied upon as legal advice because all facts and circumstances are not known to the author.