6 News Investigates: The Pension Problem

JOHNSTOWN -- A local woman living on a fixed income and a $300-a-month pension was told that she was receiving too much money.

The notice came from a federal agency overseeing her pension plan. The agency said she needed to repay thousands of dollars after it found an error, despite letters years ago that guaranteed that she was receiving the right amount.

Nora Sayers-Mikesic said she counts on her late husband's pension. He worked for the now-closed Bethlehem Steel Corp. before dying of colon cancer decades earlier.

"In 2014 when I turned 60, [the Pension Benefit Guaranty Corporation] should have lowered my income from $311.05 to $100, but they didn't," said Sayers-Mikesic.

The company that pays Sayers-Mikesic is the Pension Benefit Guaranty Corporation, or PBGC. The U.S. federal agency took over the pension plan for the former steel giant in 2003 after the company folded.

Sayers-Mikesic began receiving a monthly surviving spouse benefit after her busband's death in 1994. She remarried without any effect on her pension, Sayers-Mikesic said.

"When I notified them that I got married in [2003], I actually was expecting them to say that my widow's pension might be done then, because it made sense to me," she told 6 News Investigates in an interview in March. "If I got married, I wouldn't receive it. So when I heard 'Oh no, you still receive that, you're still entitled to it, you're still going to get that,' I was like oh good, thank you. I'm happy.'"

Sayers-Mikesic received a letter from PBGC in April 2011 that she would receive $311.05 for the rest of her life.

"The monthly amount you currently receive, $311.05, is the same amount you received from the prior plan administrator," the letter from PGBC read. "We have finished our review of the plan and your benefit, and we have determined that you are receiving the correct amount...The Straight Life Annuity provides you with a monthly benefit for the rest of your life."

"When I asked for a new statement, they then went back into my records and found out that I had turned 60 years old in 2014," said Sayers-Mikesic, now 62. "They just continued my $311.05 as usual, never informed me in a letter that when I turned 60, my amount would decrease to $100."

For three days straight in early August 2015, PBGC sent letters to Sayers-Mikesic, each one contradicting the next.

PBGC said on Aug. 3 that Sayers-Mikesic should have received $100 a month beginning April 1, 2014. The pension agency said on Aug. 4 that she would be receiving $311.05 until December 2099. On Aug. 5, PBGC said it found an error "in their original determination letter regarding [Sayers-Mikesic's] pension benefits," according to the letter. Not only would she now receive only $100 each month, but she owed PBGC more than $4,000.

PBGC said in its letter that it would collect the overpayment by reducing her monthly benefit from $100 to $93.28.

"It was like having somebody hit you with a hammer all of a sudden out of nowhere," said Sayers-Mikesic.

Weeks later, she appealed. She also contacted U.S. Sen. Bob Casey (D-Pa.) for help. His office began looking into her case.

"It didn't make any sense," Casey told 6 News Investigates.

Sayers-Mikesic heard back from PBGC in March.

She lost her appeal.

During her appeal, PBGC paid her the original benefit amount, $311.05. But in April, PBGC said it would slash that to $91.52. She now owed more than $5,000 to the pension corporation.

"That determination was that the monthly benefit would be reduced and that was what we thought was their final decision or final determination," said Casey.

"I feel like I've been handed this and [told], 'You have to accept this and you don't have a choice,'" said Sayers-Mikesic. "It just feels like no one cares. They make the mistake, but then we pay for it."

6 News Investigates contacted PBGC to discuss the case. A PBGC spokesperson spoke at length about the background of the benefit plan, saying that Bethlehem Steel is one of the two largest pension plans that the agency has took over. Asked why such a large agency would need to go after $5,000 from a woman on a fixed income, the agency didn't answer the question, saying only that her case is a private matter.

"Now is the tough part where PBGC has to take that away from her, so I agree, that's rough," said Ron Gebhardtsbauer, a Penn State associate professor in actuarial science, the study of financial business risks. He is also a former chief financial officer for PBGC.

Gebhardtsbauer said PBGC is bound by law to fix its mistakes. If there's an underpayment, the professor said the agency will pay back money owed to the pension plus interest. But with an overpayment, PBGC has to collect.

"You can't charge them interest, but you have to get that money back. But the most you can cut their benefit is 10 percent," said Gebhardtsbauer.

6 News Investigates again asked PBGC for an on-camera interview about Sayers-Mikesic's case. The agency denied the request. Instead, it sent us a statement on April 14:

Five days later, 6 News Investigates got a phone call from Sayers-Mikesic. She said PBGC restored her pension and she no longer owed the federal agency any money.

6 News Investigates received a notice from PBGC about the change, then emailed questions to the agency about the reversal and its decision to not go after the overpayment.

This statement was sent by PBGC to us via email:

"I'm glad PBGC did the right thing, ultimately, but frankly it shouldn't take the intervention of a senator's office to get that done," said Casey.

6 News Investigates sat down with Sayers-Mikesic days after her full pension was restored.

"It's a relief to know too that they stepped up," said Sayers-Mikesic. "People might say it's just about the money. But it wasn't. It was the principle. It was the feeling that they handled everything so incorrectly.

"Nobody was listening until I contacted [6 News Investigates] and you were willing to listen and you were willing to care enough to do something about it," she said. "And with Alexa at Sen. Casey's office, she was excellent and kind to speak with."

The biggest support for Sayers-Mikesic getting her benefit restored was her saving all her correspondence with PBGC.

If you have a story you would like 6 News Investigates to look into, send us an email at 6NewsInvestigates@sbgtv.com.

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