The director and board of trustees may correct benefit-payment errors, and the board can recover overpayments and require notice before reducing benefits.
§1589. Overpayment of benefits; corrections; repayment A. The director may correct any administrative error and make all adjustments relative to such correction as provided in Subsection C of this Section. The director shall correct such error based solely on sufficient documentation, which shall be submitted to the board of trustees for approval at the next board meeting after receipt of such documentation, whether such administrative error was committed by the system or otherwise. B. If an underpayment of benefits is due to an administrative error committed by system staff, the correction of the error pursuant to Subsection A of this Section may include the payment of interest at a rate not to exceed the system's valuation interest rate or the judicial interest rate, whichever is lower. C. If an amount is paid to a retiree, beneficiary, or survivor which is not due him, the board of trustees shall adjust the amount payable to the correct amount, and the board may recover any overpayment by reducing the corrected benefit such that the overpayment will be repaid within twelve months. The director or board of trustees shall notify the retiree, beneficiary, or survivor of the amount of overpayment in benefits and the amount of the adjustment in benefits at least thirty days prior to any reduction from the benefit amount without the overpayment. D. The right to collect any benefit paid to a retiree, beneficiary, or survivor which is not due him, due to administrative error by the system, applies only to amounts paid during the thirty-six month period immediately preceding the date on which notice of such error is sent to the member, except in the case of fraud. This right to collect is subject to a liberative prescription of ten years. This prescription commences to run from the date the system has actual knowledge of the error in payment. E. Notwithstanding the provisions of Subsection D of this Section, if the individual received a payment because of a fraud against the system, the right to collect such fraudulent payment shall extend to the entire amount of overpayment obtained through fraud. This right to collect is subject to a liberative prescription of ten years. This prescription commences to run from the date the system has actual knowledge of the error in payment. Acts 2021, No. 139, §1, eff. July 1, 2021.