PARAC audit flags benefit adjustments; board defers recoupment decision pending legal review

Board staff told the Retirement Board that PARAC (the state audit/oversight reviewers) returned findings and letters indicating discrepancies that may require benefit adjustments. The board discussed whether to recoup past overpayments, who would be affected, and the legal and tax limitations on retroactive recovery.

Members emphasized caution and the need for documentation. One member noted a previous legislative remedy—the Needham‑Hinden bill—that addressed a payment error in the past; staff and members agreed they need an itemized list of affected accounts and a legal opinion before voting on any forgiveness or recovery. The administrator said PARAC had indicated auditors could trace back to the start of records, but the board has discretion and must publicly post an agenda item specifying any proposed forgiveness before voting. Several members warned that recovering amounts retroactively could create hardship for retirees and might expose the board to legal challenges if not handled per statute and tax rules.

The board asked staff to compile the PARAC spreadsheets, note which items have already been adjusted, and obtain written counsel from its attorney (Michael Sacco was named as counsel to consult) about recoupment authority, tax implications, and conflict-of-interest rules for any members who would be affected by a vote. The matter was put on the May agenda; no recoupment vote was taken on April 22.

Board members also discussed internal communication lapses: some audit spreadsheets were circulated to certain board members before the administrator’s office had reviewed them. Members agreed to centralize the reconciliations and to present black-and-white figures and supporting documents at the May meeting so the board could take an informed vote if appropriate.