Oops… Now What? Navigating Benefit Overpayments Under Secure 2.0
Insider Insights for Multiemployer Plans | January 14, 2026 | 3-minute read
Featuring Lisa Gomez, former Assistant Secretary of Labor, Employee Benefits Security Administration (EBSA)
Key Takeaways
SECURE 2.0 moves overpayment handling from mandatory recovery to fiduciary discretion. Plans may recover, offset, or forgive, depending on the circumstances.
New participant protections limit certain recovery practices, including interest and penalties, and emphasize fairness and hardship.
Flexibility doesn’t remove fiduciary responsibility. Decisions must be prudent, consistent, and documented.
A formal overpayment policy and decision-making framework are your best protection.
What Changed Under SECURE 2.0
Multiemployer plans are no longer required to recover every inadvertent overpayment. Instead of automatically pursuing repayment, fiduciaries can evaluate the facts and choose the most appropriate course of action. That was the focus of Zenith American Solutions’ webinar, “Oops… Now What? Navigating Benefit Overpayments.”
Your options now include:
Recovering the overpayment
Offsetting future benefit payments
Forgiving certain overpayments
The right choice depends on the facts, your plan provisions, and fiduciary considerations.
Expanded Participant Protections
SECURE 2.0 limits certain recovery practices and puts more emphasis on fair treatment. Protections may include:
Restrictions on interest and penalties
Limits on recovery from future payments
Consideration of participant hardship
Time limits on certain recovery efforts
Why Governance Still Matters
SECURE 2.0 offers relief from certain fiduciary liability tied to inadvertent overpayments when plans follow appropriate procedures [confirm exact wording with counsel]. But the relief depends on process. Poor documentation or inconsistent treatment can still create legal, operational, and fiduciary risk.
Flexibility does not eliminate fiduciary responsibility.
Plans that set clear policies, document their decisions, and apply their process consistently are better positioned to handle overpayments fairly.
Frequently Asked Questions
Do we still have to recover benefit overpayments?
Not always. Plans generally have greater discretion to choose recovery, offset, or forgiveness. Decisions should follow a documented fiduciary process and reflect plan-specific circumstances.
How do we decide whether to recover or forgive an overpayment?
Evaluate the facts, the impact on the participant, plan policies, administrative considerations, and applicable legal requirements. A documented decision-making framework supports consistency and prudent governance.
Your Overpayment Checklist
Establish a formal overpayment policy.
Create a documented decision-making framework.
Review administrative processes to prevent future errors.
Coordinate with administrators, actuaries, auditors, and legal counsel.
Keep records that support fiduciary decisions and oversight.
The Bottom Line
SECURE 2.0 gives multiemployer plans more flexibility with benefit overpayments, but not less responsibility. The most successful plans will combine strong governance, clear policies, and careful documentation to protect both participants and plan assets.
Related
About Insider Insights for Multiemployer Plans
Zenith American Solutions’ Insider Insights webinar series delivers timely perspectives on regulatory developments, fiduciary responsibilities, operational best practices, and emerging trends affecting Taft-Hartley and multiemployer plans. Each session helps trustees, fund offices, and industry professionals make confident decisions in an evolving benefits landscape.