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Options for PERS Lump Sum Recipients

May 8, 2007
The following information is from a memo from Greg Hartman, our PERS attorney.

PERS has begun sending invoices to persons who took lump sum distributions, often demanding a substantial repayment under the City of Eugene/Strunk reconciliation process.

Members who receive these invoices have some options.

Call Your Lawyer!
The first and most important step, according to our attorneys, is where there are questions about legal issues to seek advice from your own attorney.

Four Options
1.  Pay the invoice. Some invoiced amounts are relatively small and some members may be able to pay without undue financial strain.

If it turns out later PERS was in error, the money will be returned. Our attorneys will attempt to make sure interest is also paid for the time PERS has the money.

2.  Appeal the determination. The notice indicates members have this right and may file within 60 days.

3.  Tax-free rollover back into PERS? PERS is exploring this possibility. Assumably many who took a lump sum payment rolled the funds over into another tax-free vehicle.

Withdrawal of funds would lead to paying taxes on that money, which may not be recoverable. Additional information has been requested from PERS.

4.  Do nothing. However tempting, this could simply make things more difficult and costly. Our attorneys recommend the member communicate with PERS regarding inability to pay.

Download the memo from attorney Greg Hartman for more info.