1. (a) Retiree receivables.

   1. (1) When Arkansas Public Employees’ Retirement System determines that it has overpaid a retiree for whatever reason, the retiree is to be notified by letter as soon as reasonably practicable.
   2. (2) The next month’s annuity payment shall be for the corrected amount.

   3. (3) The retiree shall be given the following options:

      1. (A) Repayment in one (1) lump sum;
      2. (B) Repayment of a specific dollar amount over a number of months, the amount dependent on the amount of the overpayment in relation to the size of the monthly benefit; or
      3. (C) Reduction of future monthly annuity payments in equal pro rata amounts until the overpayment is fully recouped.

   4. (4)

      1. (A) In the event that the retiree disputes the fact of an overpayment, he or she shall first have the appeal considered by the Executive Director of the Arkansas Public Employees’ Retirement System.
      2. (B) If the executive director’s decision is unsatisfactory, the retiree shall have the right to an appeal before the Board of Trustees of the Arkansas Public Employees’ Retirement System.
      3. (C) Contributions to the account shall be increased for COLAs and ad hoc increases granted to retirees.

2. (b) Deceased retiree receivables.

   1. (1)

      1. (A) Upon learning of the death of a retiree, the system shall immediately cancel all future payments.
      2. (B) Where possible, the system shall contact the bank receiving the deceased retiree’s direct deposit of benefits and ask for a return of the last payment.

   2. (2) With surviving beneficiary.

      1. (A) The designated beneficiary shall be notified as soon as reasonably practicable by letter of the overpayment.
      2. (B) The survivor shall be given the following options:

3. (i) Return the annuity payment or payments made after the death of the retiree in a lump sum prior to receipt of any survivor benefits; or

   1. (ii) Reduction of the survivor’s monthly benefit by a specific dollar amount over a number of months until the overpayment is fully recouped.
   2. (3) This recoupment process shall comply with the procedures and principles used by the Social Security Administration which mandate recoupment balanced with consideration of the financial impact upon the surviving beneficiary.

   3. (4) With no surviving beneficiary.

      1. (A) The system shall send notice of overpayment to the estate of the deceased retiree.
      2. (B) Duplicate notices of overpayment shall be sent every thirty (30) days for a maximum of ninety (90) days until response is received.
   4. (5) In the event that no response is received, the system shall evaluate the receivable for possible abatement at the next fiscal year-end, following the Department of Finance and Administration’s rules for outlawed warrants.
   5. (6) If the system has reasonable cause to believe that the overpayment is due to criminal malfeasance, the agency shall notify the prosecuting attorney of the county where the deceased retiree last resided.

Codification Notes: “COLA” means cost of living adjustment. This section as promulgated prior to codification into the Code of Arkansas Rules provided as follows: "222– 2017 (10) – Recoupment of Overpayments"