Direct Deposit Payments Made in Error
When retirees or their beneficiaries are reported as deceased, the state’s retirement systems may determine that the retirement/pension payment is not due. The retirement systems must submit a reclamation request to recover the funds.
A reclamation request must be processed within five banking days after the retirement system receives notification of the payee’s death. If a monthly retirement payment has not been transmitted through the automated clearing house (ACH) network, the payment should be canceled via the 44 Single Payment Cancellation screen in the Uniform Statewide Accounting System (USAS).
Once the payment is transmitted to the ACH network, a reclamation request may be submitted. If the issue date for the payment falls within the current reversal period, a reclamation (not a reversal) is required if the payee is deceased.
Each retirement system is required to process its own reclamation requests via the Direct Deposits – Reversals and Reclamations (DDEP) web application. See Instructions for the DDEP Web Application for more information.
The Reclamation Request for ACH Transactions form (74-226) should only be submitted if the agency is not able to access DDEP to process its own reclamations. The retirement system must explain why it is not able to access DDEP.
Reclamation requests for annuity payments must be processed through the Comptroller’s DDEP web application. The retirement systems may not initiate an ACH reclamation entry nor contact the payee’s receiving depository financial institution (RDFI) to request a reclamation until the Comptroller’s reclamation process is complete.
If the Comptroller’s ACH reclamation request fails to recover the funds, the Comptroller’s office will initiate a written demand letter (WDL) to the deceased payee’s RDFI. If the RDFI does not respond to the WDL within 30 days, the Comptroller’s part in the reclamation process is considered complete. At this point, the retirement systems may initiate their own WDLs and/or contact the RDFIs directly.
Funds received from successful reclamations are deposited into the paying agency’s default fund 0980. To request a change from this default fund, see Successful Reversals.
Reports are available to download the day after reclamation requests are processed; see Reversal/Reclamation Reports. The retirement systems can track the status of their reclamations on DDEP. See Payment Search for more information and step-by-step instructions.