Retirement Overpayment
Use these procedures to offset and collect a retirement overpayment within Additional Payments (0015) and Recurring Payments/Deductions (0014) infotypes.
A retirement overpayment occurs when the employee’s retirement contributions were not deducted or not enough was deducted and the employee erroneously received the amounts as net pay instead.
The employee’s master data must be corrected prior to offsetting or recovering an overpayment. Refer to Payroll Simulation – Find an Overpayment to determine overpayment amounts. Retirement overpayment amounts can be located in the Arrears (ARRS) table within the paysim located in the period prior to current period.
The following two generalized scenarios handle retirement overpayment recovery for an employee overpaid due to a Savings Plans (0169) infotype record not being created. The agency corrected the master data and ran a Payroll Simulation to determine the gross retirement overpayment of $300.
SCENARIO 1: Authorization was immediately received from the employee to repay the entire amount out of the next payroll. In this scenario, no further action is required. Payroll will process, reducing the employee’s gross pay by $300 and the funds will be sent to DRS.
SCENARIO 2: The employee didn't provide authorization of a repayment plan before payroll processed. Prior to payroll processing with the master data correction, the payroll processor will follow the Retirement Overpayment - Offset an Overpayment procedure to offset the total gross overpayment in the current period. Later, authorization is received from the employee and the employee agrees to repay the amount in three $100 payments within the current tax reporting year. The payroll processor will follow the Retirement Overpayment - Recover an Overpayment procedure to create a Recurring Payment/Deductions repayment plan.