Matthew Kibler’s pension has become a liability for him.

The retired City of Pontiac employee recently received a letter stating that he owes more than $5,000 to Pontiac’s largest pension fund.

The letter said Kibler, 63, has been overpaid by $85.10 per month using an incorrect formula since he retired from the city five years ago, in January 2008. The retirement office has now made Kibler’s final benefit calculation and determined he was overpaid.

Kibler worked for the city maintaining its cemeteries.

“Once I became disabled and couldn’t work, he had to take two jobs,” said his wife, Catherine, 69.

The miscalculation will cost the Kiblers hundreds of dollars a month for the retirement office’s mistake, she said.

“That’s ridiculous to take five years (to calculate the benefit amount). We could very well lose our house.”

The Kiblers have been given the choice of paying either $212.77 per month for 24 months or $106.38 per month for 48 months out of Matthew’s pension check, which will also be reduced by $85.10, Catherine said.

Her husband said: “It’s like they broke my legs and told me to jump.”

The Kiblers said they’re going to a legal aid office for help, and, if needed, will find an attorney who specializes in retirement issues.
The Pontiac General Employees Retirement System has about $435 million in assets as of Jan. 16, is approximately 153.5 percent funded and serves about 1,100 retirees.

Pension board chairman and former Pontiac City Councilman Charlie Harrison III did not return a call for comment.

City of Pontiac Retired Employees Association President Claudia Filler said: “It’s an outrage it went on that long and amounted to that much.” Filler retired from the city as director of the Department of Public Works.

City Finance Director John Naglick, who serves as secretary of the pension board, said the retirement office falling behind on benefit calculations makes an argument for moving to third-party administration of the pension fund.

“We’ve been struggling with it for a while. The good news is they claim they’re caught up now, and when I see problems like this, it just shows me I was right to be concerned,” Naglick said.

“I’m disappointed we’ve treated them that way,” the finance director said of city retirees.

The city’s Police and Fire Retirement System, a smaller pension fund for retired police and firefighters, moved its administrative functions to Troy-based BeneSys, Inc. on Jan. 1.

Naglick has estimated that outsourcing the operations of the pension fund for general employees in a similar fashion would save about $231,000 over the term of the contract.

Retirement Administrator Ellen Zimmerman distributed a memo to the pension board in February that addressed final benefit calculations.

In March 2012, the memo said, the retirement office had a backlog of 52 final benefit calculations for police and fire retirees and 82 for general employees.
The delay came after “the termination of the police and fire unions, mass layoffs, multiple early retirement incentives and partial plan termination for both systems,” Zimmerman wrote in the memo.

“At the same time, the Police and Fire Retirement System board voted to go to a third-party administrator and the office also had to transition those operations; we are still training them.”

As of Feb. 27, there were five remaining final benefit calculations to be done for general employee retirees, Zimmerman’s memo said, and once they’re completed, the retirement office would be up to date through December 2012.

From The Oakland Press