AT&T Overpaid Some Pensioners. Now It Wants the Money Back

When James Mizelle retired in 2001, he started drawing a pension from his 27-year career with AT&T and other phone companies.

Fifteen years later, he got a letter saying his benefits were miscalculated and demanding he repay $32,116.05. Mr. Mizelle, living in Round Hill, Va., replied that he couldn’t repay. Within weeks, he heard from a collection agency.

“That money had been spent,” says Mr. Mizelle, 70, who had incurred medical bills in a battle with prostate cancer. “I could not pay it back.”

The former programmer and human-resources worker is among potentially hundreds of ex-employees whom AT&T Inc. has dunned in recent years for what it calls pension “overpayments.” AT&T sometimes has enlisted a collection agency to recover the money, a move retiree advocates, pension lawyers and some former Treasury Department officials call unusual.

Among them are 17 retirees from whom AT&T and Fidelity Investments, the pension plan’s record-keeper, have demanded a combined $1 million and who have contacted lawyers working with the Pension Rights Center, a retiree-advocacy nonprofit in Washington, D.C., or related groups around the country, the center says.

An AT&T spokesman says the pension overpayments affect “significantly less than 1/10th of 1%” of its about 517,000 participants, with “a very small percentage” referred to collections. He declines to say how the company identified the errors or how much money is at stake.

A Fidelity spokesman says the firm helped zero in on errors at AT&T’s direction, including some predating Fidelity’s role. AT&T and Fidelity decline to address the individual cases in this article.

Companies for years have been taking measures to recoup pension overpayments, an issue federal tax officials have tried to address going back to the 1990s with a series of refinements to rules governing when and how companies must rectify such errors.

AT&T appears to have gone a step beyond many other large companies by sticking to its demands of full repayment and hiring a collection agency in some cases, even where retirees make the case that they lack the wherewithal to repay.

https://www.wsj.com/articles/at-t-overpaid-some-pensioners-now-it-wants-the-money-back-1533306044?mod=hp_lead_pos5