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Some retirees are being cheated

Published August 31. 2013 09:00AM

Dear Editor:

Some, perhaps thousands of state retirees are being cheated by the State Employee's Retirement System (SERS) out of a significant portion of the retirement benefits for which they worked faithfully for many years.

Any state employee who retired, received an annuity and/or withdrew their contributions to their retirement amount and then returned to state service for several years has had the misfortune to have their retirement benefits calculated erroneously.

When these retirees returned to state service, the funds they received during their retirement were considered to be a debt to the retirement system. While they continued to work during their second period of employment, the retirement system added interest to those debts.

For many years, SERS has been compounding that interest. Legislation which guides SERS policy {see 71 Pa. C.S.A. S5706 (c) (3)} refers only to "interest." there have been many court decisions which mandate that if a contract, or in this case legislation, does not specify "compound interest," then simple interest must be applied.

By SERS adding compound interest to those retiree's debts, their debts increased much more than they would have had simple interest been added. The larger a retiree's debt, the greater will be the reduction to the retirement benefits to be received. These retirees are losing thousands of dollars each and every year of their retirement. If the retiree has passed away, their beneficiaries are also losing a substantial portion of their benefits.

SERS has also known about the error for almost five years since a claim was filed for a retiree who has been a casualty of the error. To date, SERS does not deny that the claimant's benefits were miscalculated, but has not acknowledged the error.

Please inform your readers of the retirement system's error. What was perhaps an error to begin with, now after five years of refusal to make things right, can be considered to be nothing less than theft. This, by a state agency, the mission of which is to serve the interest of retirees who worked faithfully for many years to receive their retirement benefits.

You may confirm this information by contacting attorney Jonathan Ruds at (717) 232-8000, or SERS Deputy Chief Counsel Nicholas Joseph Marcucci at (717) 783-7317.

A word of caution however. If you contact SERS about this situation, be prepared for their attempt to coerce you into not disseminating this information to the public. Due to many years of mismanagement, the retirement system is in deep financial trouble and they will try to avoid receiving more claims from the many retirees who have every right to be compensated for what they have been denied.

The Public School Employees Retirement System is also guilty of this error.

Kenneth w. Fultz

Long Pond, Pa.

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