Bank error to blame for withdrawn pension payments

Nov 6, 2009 5:57 PM

Some 64,000 retirees, including 53,000 UFT retirees, who rely on electronic pension payments had funds involuntarily withdrawn from their accounts on Nov. 6, causing all sorts of grief for those counting on the money. The Bank of New York Mellon, which is the transferring agent for the funds, erroneously reversed the October benefits payments to retirees paid through electronic fund transfer. The total came to almost $189 million, according to the City Comptroller’s Office.

“We’re outraged. This is unacceptable,” said UFT President Michael Mulgrew. “We have been on top of this since the calls first started coming in early Friday morning and we will continue to work until all of our members have been made whole. Our first priority is to get all of the money back into our members’ accounts.”

The Bank of New York Mellon is now assuring the union and the Teachers’ Retirement System that retirees’ accounts will be corrected no later than Monday. Go here to read the bank’s full statement. The bank has agreed to reimburse the retirees for any costs they incur because of this problem.

“We want the bank to explain to us how this happened and to tell us the changes that it will put in place to make sure this never happens again,” said Mulgrew. “We are calling on the city and the state to begin an immediate investigation.”

If you are a retiree whose pension funds were transferred out of your account because of today’s banking error and you incurred any financial harm as a result, make sure you keep proof.  That includes receipts and/or other paperwork that detail any overdraft fees or bounced check fees that occur.

The Bank of New York Mellon has set up two toll-fee hotlines for retirees with questions: 1-800-627-8000 and 1-800-242-9100.

When updated information is available, TRS will post it on its Web site. The UFT will also keep retirees updated via the Web site, its hotline and e-mail blasts.