15.16 - 2. Errors In Payment

JurisdictionNew York

2. Errors in Payment

The comptroller is directed to correct any errors in payment upon discovery and “adjust payments in such a manner that the actuarial equivalent of any benefit rightly due shall be paid.”6908 Litigants have argued that the retirement system should be estopped from correcting errors or adjusting payments; however, decisions continually affirm the duty of correction, even where the outcome can rightfully be characterized as harsh.6909

The case most often cited in support of correcting errors is Newcomb v. New York State Teachers’ Retirement System,6910 involving Education Law § 525, which mandates that the retirement board correct its records. The Appellate Division has stated that a retirement system is obligated to “correct any errors in its records which would result in any employee or beneficiary receiving . . . more or less” than authorized by law.6911 As early as 1947, the attorney general issued an opinion that the retirement system could not be required to pay an erroneous retirement allowance to a member merely because it had provided that member with an estimate of benefits that proved to be in error. The opinion held that the retirement contract was created by statute and that the comptroller was without power to enter into any further or different contract for increased benefits.6912

Not only must the comptroller correct all errors, but they may be corrected at any time.6913 In fact, the courts have held that the comptroller must, upon discovery, correct any error or change in any record of the retirement system.6914 Even where a member has actually been receiving a retirement benefit that is subsequently deemed erroneous by the comptroller, the courts have upheld not only cessation of payments, but recapture.6915 The Court of Appeals supports this point of view, even where it causes the retiree enormous hardship, because “the retirement system’s statutory responsibility, supported by broad public policy considerations, requires that it take all necessary steps to insure the financial integrity of the pension fund.”6916

Even where a member has given correct information to a retirement system, which should have precluded membership, the estoppel argument is of no avail. In Syrewicz v. New York State Teachers’ Retirement System,6917 the petitioner, who had retired from the New York City police department and subsequently accepted a teaching position, filed for and received membership in the New York State Teachers’ Retirement System. The petitioner had correctly indicated on the application that he was receiving retirement benefits from a public retirement system, which should have precluded his entrance into the New York State Teachers’ Retirement System. The court, in retroactively...

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