Mass. Public Employees Entitled to Interest on Wrongfully Withheld Retirement Benefits

In Herrick v. Essex Regional Retirement Board, the Massachusetts Appeals Court decided that a retirement board is obligated to pay interest on benefits wrongfully withheld or denied to a retiree. The retirement board denied a pension to the retiree in this case. The courts reversed this decision, directing the retirement board to provide a pension to the retiree. The retirement board cut a check for pension payments it should have paid to the retiree. The board did not include any interest on the payments.

The Appeals Court agreed that the board should have included interest on the payment, in order to correct the effect of its error and place the retiree in the same position he would have been but for the initial bad decision of the board. The Court disagreed however that the board was obligated to pay 12 percent annual interest and instead directed the board to pay actual interest.