The MTA is demanding that the widow of a retired LIRR train engineer who died in September repay nearly $27,000 in excess pension benefits the couple had received since 1995 because of an agency clerical error.
Shirley Findel, who turns 80 next month, said she was informed last week she could pay the money back over nine years through a monthly deduction of $240 from her benefits, down from an initial demand for a $380.89 monthly deduction or payment in full.
Findel said that any reduction would impose a financial hardship and that she was angry about having to pay for a mistake the Metropolitan Transportation Authority failed to discover or disclose for almost two decades.
"I don't think I should have to pay for their mistake," Findel said from the New Port Richey, Fla., home to which she and her husband, Harry Findel, moved from Long Island. "It took them 18 1/2 years to find out? We didn't know -- I have the paper Harry signed, we gave them the paper and we figured everything was fine. . . . I wake up thinking about this and I go to sleep thinking about this."
The MTA error was uncovered only after Findel notified pension administrators that her husband had died last fall at age 83. She said she was told that a "processing error" in 1995, when her husband turned 65 and the retired engineer's LIRR pension took effect, had resulted in the couple receiving an overpayment of $124.80 a month for 214 months.
Salvatore Arena, an MTA spokesman, defended the demand for repayment. "The LIRR pension plans have a fiduciary duty to the participants and beneficiaries of the trust to recover funds that are improperly paid to a beneficiary, even if it is the result of an inadvertent error," he said in a statement. "The MTA will work with Mrs. Findel to review the circumstance of her case and reach a fair and equitable solution."
The couple had opted for a pension plan with a lower payout so that it would continue if Shirley Findel survived her husband. It included a base plan that paid out a monthly benefit of $504.89 base and a so-called "additional plan" that should have paid out $380.09 a month, but instead was incorrectly processed as $504.89.
The pension plan "is obligated to correct this error and seek to recover the overpayment," according to a letter sent to Findel by the MTA Consolidated Pensions administrators, which handle her husband's LIRR pension plan. The pension plan had reduced the widow's monthly benefit to the correct level after realizing the mistake last fall, then last month sent her the letter demanding repayment.
Findel said an administrator called her last week with the offer of a somewhat lower monthly deduction -- $240 rather than $380.09 -- but she wanted to see the offer in writing before considering it.
She noted that her income had already dropped sharply at her husband's death. "If I have to, I'll sell my house and get an apartment somewhere," she said.
The Findels' daughter, Linda Box of Brentwood, said she is now going to contact local elected officials while her mother reaches out to the national headquarters of her husband's union, the Brotherhood of Locomotive Engineers and Trainmen.
"We do not understand how they can even go back 20 years and demand this money for their clerical error," she said. "We have spoken to lawyers who claim that they [the MTA] can legally do this, but is it morally right?"
Mark E. Brossman, a partner in the New York law firm Schulte, Roth & Zabel, and a pension attorney primarily representing fiduciaries of both public and private employee benefit plans, said fiduciaries do have a responsibility to attempt to recover overpayments. But, he said he believed they had some discretion.
"I would tell the trustees you have to try to get the money, to see what's going on," he said. "If she says, 'I'm living day to day, I'm 80 years old and I don't have the money,' in my view, the trustees have the discretion to decide 'We're not going to harm this person because of our mistake.' "
However, New York University law professor Brookes Billman said failing to recoup overpayments could burden the pension system -- and others who would have to make up for unrecovered expenditures.
"It is a difficult problem, but one portion of the bottom line is this -- the retired employee or beneficiary has been receiving more benefits than they should have," he said. "So it seems to me that it is fair in the public sector to recoup the excess from the retired employee or beneficiary very gradually so that the impact of the recoupment is as small as possible."
Lee Adler, lecturer in collective bargaining and labor law at Cornell University's School of Industrial Labor Relations, said he was troubled by the MTA placing the burden of its own error on Findel's widow.
The MTA had "a responsibility to pay the right amount initially" and after having paid out the wrong amount for "such a long period of time, they may have a legal right to recoup the money, but such a right is overshadowed by moral concern," Adler said.
The MTA is a multibillion-dollar public authority better able to absorb the results of its own error than an elderly woman on a fixed income, he said.
"Where is their fiduciary responsibility in regard to these 214 overpayments, and shouldn't the persons in charge of the pension [fund]'s fiduciary responsibilities be held accountable?" Adler said.