PERA ignores errors that short-change retirees

ALBUQUERQUE (KRQE) — New Mexico’s Public Employees Retirement Association has known for years that it’s been underpaying some retirees while overpaying others, yet the agency failed to address the discrepancies.

That’s according to a two-month-long investigation by News 13’s Larry Barker, who found that PERA may have shorted hundreds of retirees nearly $500,000 going back almost a decade. It also may have to recoup as much as $600,000 in overpayments.

“My immediate reaction is one of disgust,” said state Sen. Pete Campos, D-Las Vegas. “These are resources that individuals have worked hard to earn to reinvest and these are the dollars that they depend on for the rest of their lives.”

For example, Sheila M. retired in 2008 after 20 years working for the state. But for the last five years, PERA has shorted her pension check by $69 a month, according to documents obtained from PERA.

Dona C. retired in 2010 after spending most of her adult life working for the State of New Mexico. Records show that PERA cheated her out of $111 every month since then. Finally, Roberta R. retired from the City of Rio Rancho three years ago. PERA has short-changed her $89 a month since then, records state.

The retirement agency owes each retiree about $3,000.

And these aren’t discrepancies that just recently came to light. PERA red-flagged hundreds of apparent errors each month they occurred, but did little about them.

“I will probably be apologizing to some members,” said Wayne Propst, PERA executive director. “I don’t make excuses so I’m not going to say there’s a good excuse.”

PERA offers more than 30 different pension plans, and more than 30,000 New Mexicans currently receive benefits, so calculating those benefits is a complicated process. That’s why PERA produces an internal, confidential discrepancy report every month that lists the accounts in which the computer system detects a calculation error.

The report lists the amount a retiree currently receives, the correct payment and the amount over-or-underpaid. A typical report can run 150 pages and lists nearly 700 red-flagged retiree accounts.

However, just because someone appears on the list doesn’t necessarily mean a mistake was made. That means a PERA employee should be reviewing all of those red flags and figuring out what, if anything, is wrong.

But documents obtained by News 13 show that PERA employees did nothing of the sort. In fact, the retirement agency repeatedly disregarded more than $1 million in discrepancies, with some apparent mistakes going back years, the records state.

That certainly happened with Sheila, Dona and Roberta. Records indicate that nobody at PERA seemed to notice mistakes in their pensions despite the fact that they were red-flagged in June, July, August, September, October, November and December.

In total, the agency may have shorted hundreds of retirees about $485,000, with some of the discrepancies going back eight years. And it was only after News 13’s investigation began that the agency started to address those benefit check discrepancies.

“There’s clearly been a backlog here at PERA in terms of reconciling differences on this report for some time,” said Propst, who took over as PERA’s director last year.

He said the agency only had one full-time staff member assigned to the backlog of discrepancies.

“Each and every one of the accounts on this is a unique set of circumstances that needs to be researched,” Propst said. “But I can’t answer why someone who has been on the list for a year or two or more why that wasn’t reconciled.”

And it’s not only underpayments.

Former State Police Chief Faron Segotta’s retirement benefit has been repeatedly red-flagged because of an overpayment, according to PERA records. Again, the agency ignored its own reporting and failed to correct the error. In fact, the agency is facing the daunting task of recouping as much as $600,000 from some 200 retirees who may have been overpaid, records state. However, retirees who were overpaid more than 12 months can consider themselves lucky.

“We are only allowed to go back 12 months to recoup 12 months of overpayments,” Propst said.

State Rep. Bill Rehm, R-Alb., who serves on the Pension Oversight Committee, said he felt “total frustration” when told of the problems.

“I mean I am deeply upset,” Rehm said. “This is ridiculous. I’d like to hear a good excuse.”

State Sen. Stuart Ingle, R-Portales, said he was equally frustrated.

“We’ve got to get where we are not making mistakes like this,” he said. ‘There shouldn’t be more than a 100 or 150 – I don’t know how many are on this list but there’s way more pages than there should be. And I’m going to be watching this and asking questions.”

Propst said he’s assigned additional resources to clear up the backlog, and he hopes to have the issue cleared up in a month or two.

“We’re humans,” Propst said. “We make mistakes. Our system will make mistakes. But where we discover that we need to do better for our retirees, we are going to do so. If there is a difference in their pension payment, they will be hearing from us.”

Copyright 2014 KRQE TV. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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New Mexico (change)

New Mexico is located in the southwestern region of the U.S. Inhabited by Native American populations for many centuries, New Mexico has also been part of Imperial Spain, part of Mexico, and a U.S. territory.
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