The Boston Herald
Wednesday, October 13, 1999
Retiree: I've spent overpaid pension
by Ellen J. Silberman
The retired schoolteacher who collected an extra $800,000 pension mistakenly paid
to her said yesterday she "did what many people would do" -- she spent it.
Joan L. Phillips of Centerville said she was surprised the Massachusetts Teachers'
Retirement Board didn't cut off her whopping pension earlier.
"I expected a long time ago if there were any questions the retirement board
would audit me," Phillips said.
Retirement board officials say Phillips, who retired in 1980 after teaching in
Ashfield, Beverly and Maynard, collected more than $800,000 in pension overpayments from
1990 to 1999.
Phillips was supposed to get about $800 a month, but in September 1990 her check
suddenly jumped to $1,407 a month.
In October 1990, the payment jumped again to $8,394 a month. The overpayments were
discovered during a routine August audit.
Attorney General Tom Reilly filed suit Oct. 1 in Suffolk Superior Court against
Phillips to recover the cash.
But Phillips said she didn't have the money to pay the state back.
"I just got used to it. I spent it," Phillips said.
She said much of the cash -- $70,000 a year after taxes -- had been spent on
traveling "around the world."
Phillips said she felt no obligation to inform the retirement board that her
monthly check had jumped tenfold.
"I assumed the board would be right," said Phillips. "I know it
sounds strange. I just didn't know. I was confused. I still am."
Phillips told the retirement board that she had gone to her bank when her monthly
pension jumped and had been told the $8,000 payments were correct.
But Phillips also said the unidentified bank clerk told her either that the amount
was wrong or the account was in error.
Phillips is not facing criminal charges.
But Thomas R. Lussier, executive director of the retirement board, said he thought
it was "highly unlikely" Phillips' pension was increased by mistake. A small
number of staffers in the retirement system and state Treasury had the ability to alter
the account.
But Phillips' attorney, Christopher M. Uhl of Worcester, said Lussier was just
trying to deflect blame.
"If I was one of the schoolteachers up there, I'd be kind of mad that the
board and their employees aren't really paying attention to the retirement fund," he
said.
Phillips dressed for the hearing in a pink blazer and purple skirt and carried a
turquoise clutch that matched ornate earrings.
She wore dark glasses throughout the brief meeting and was accompanied by her
husband, Frank, a retired mortgage broker.
Uhl said the Phillipses owned their house in Centerville, a single car and about
$72,000 in an account at the Cape Cod Bank and Trust.
Earlier this month, the court froze Phillips' assets at Reilly's request.
Uhl said cutting off Phillips' pension would force her onto the welfare rolls.
"There's no question if her retirement is cut off as of today, she then
becomes a ward to the state," Uhl said.
But the court order clearly allows Phillips to pay "ordinary and normal
living expenses."
