If surviving spouse also a MTRS retiree, MTRS may deduct overpayment from spouse’s benefit

In the event that we are not notified in a timely manner of a retiree’s death, or the retiree’s death occurs after our mid-month processing date and we are unable to stop their benefit payment, an overpayment may occur. When this happens, it is our responsibility to recover any benefits paid after the date of death.

In these cases, we understand that it may be a difficult time, and we work closely with our retiree’s survivors, and his or her estate, to explain the steps that we need to take to reclaim the overpayment, or that they need to take to repay it.

In brief:

  • Shortly after being notified of a benefit recipient’s death, we send a notice to the recipient’s bank, requesting the reclamation of the overpaid funds. We also mail a copy to the estate’s administrator or other contact person.
  • If the recipient’s bank does not return the full amount of overpaid funds to the MTRS within three weeks, or if the funds recovered do not eliminate the debt, we then send a billing letter to the surviving spouse or contact person (or, if there is no contact person, to the estate), notifying the estate of the remaining debt, how to pay the debt, and requesting payment within 30 days.

In most cases, the recipient’s bank or survivor returns the overpaid funds to the MTRS, and the retiree’s account is closed.

However, if the amount is not repaid, the MTRS will pursue several options to recover the funds. The Board may:

  • refer the debt to a collection agency,
  • report it to the Department of Revenue so that any funds payable to the estate may be intercepted, or
  • now, pursuant to the Board’s recently amended policy, deduct the remaining debt from the surviving spouse’s monthly benefit if he or she is also an MTRS retiree, and our records indicate that the retiree and the surviving spouse were married and living together at the time of the retiree’s death.

We understand that it can be an uncomfortable subject to broach, but have the talk now: Advise your survivors to notify us as soon as possible after your passing to notify us, so that we may process any benefits that may be payable, and to help prevent the potential issues involved with unnecessary overpayments. For additional info, see our web page on reporting the death of a benefit recipient.