The company issending letters demanding the return of the money, and ifthose don't work, it calls in a collection agency. (Photo:ALM)

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AT&T made some mistakes in calculating pension benefits for some of its ownworkers.

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But, as the Wall Street Journal reports, it didn't attemptto correct its mistakes until years later, whenthose pension benefits had long since been paid and spent. So it'sturned loose the dogs of collection on its own retirees.

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We're not talking about small amounts of money, either, thatmight be within a retiree's ability to repay—one retiree received a letterasking for more than $32,000 (he was contacted by a collectionagency within weeks of telling AT&T that he couldn't repay it),while another was targeted for more than $58,000 and a third morethan $45,000.

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Related: DOL boosting “missing participant” retirement planaudits

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Add in bouts with cancer or heart trouble, age that preempts ahigh-earning return to the workforce and choices made on the basisof figures provided by the company itself, and these people arefacing stress at a time in their lives when there's really not muchof an alternative but to seek help in challenging such demands.

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WSJ says the overpayments could potentially affect hundreds offormer employees. If letters demanding the return of the moneydon't work, they call in a collection agency. And the collectionagency, according to retirees, is pretty persistent.

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So 17 of AT&T's retirees have called in some help of theirown: the Pension Rights Center, a retiree-advocacy nonprofit inWashington, D.C., or related groups elsewhere in the country.

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Fidelity Investments is the pension plan's recordkeeper and,according to WSJ, a Fidelity spokesman says the firm “helpedzero in on errors at AT&T's direction, including some predatingFidelity's role.”

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Roger Curme, a lawyer with the South Central Pension RightsProject, a legal-assistance service funded in part by the U.S.Department of Health and Human Services, is quoted in the reportsaying of the collection agency tactics, “We haven't seen thatbefore. These tactics that AT&T is using…they're kind ofharsh.”

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While in general it's legal to ask for the money back, theFidelity spokesman told WSJ, “Not recouping the monies wouldmean that there would be fewer funds available for distribution toother participants.” In fact, those experts call attention toInternal Revenue Service guidance suggesting that “plans had topursue repayments vigorously or risk losing key tax benefits, suchas deductions for employer contributions and tax-free investmentreturns.”

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But that doesn't help the retirees with no way to repay. JayKuhnie, president of the National Chrysler Retirement Organization,a retiree-advocacy group, says in the report that some retireesmight have changed plans on where to move or when to retire hadthey known the accurate figures. He's quoted saying, “They mighthave said, that's not as much as I thought, I'm going to workanother 4 to 5 years. The retiree has no way of going back.”

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And when retirees complained as far back as 2015,TreasuryDepartment and IRS officials issued new guidance, “clarifying thatplans could recover funds in other ways instead, including fromcontractors responsible for errors. Companies could also replacethe missing funds themselves, or modify plan rules retroactively toaccommodate the overpayments, according to the guidance.”

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“It clarified that plan sponsors were not always required torecoup inadvertent overpayments and pursue all available legalremedies to do so,” Mark Iwry, a Treasury Department official from2009 to 2017 who worked on retirement policy, told WSJ. That newguidance “took a step toward making the system more practical,workable, and humane.”

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