Some former government employees are being forced to take a massive cut to their pensions years after retiring, because of what the organization in charge of calculating and administering the benefits says was a mistake that led to overpayments.

Alberta Pensions Services (APS), the government corporation that oversees the pensions of more than 330,000 Albertans, cut the monthly amounts for 22 pensioners and encouraged those retirees to sign a document agreeing not to talk about it.

Jay Kembhavi is risking a lot by deciding to Go Public.

"It's very intimidating. Big government going after you and basically threatening you," Kembhavi told Go Public.

The former Alberta provincial employee has been retired for five years. All that time, he's been receiving the defined benefit pension he was quoted while working for the province for more than a decade.

Alberta Pensions Services, a crown corporation entrusted with overseeing more than 330,000 pensions, says some were miscalculated.. (CBC)

Last year, he and 21 others got letters from APS, saying it had miscalculated pension amounts and that monthly benefits would be drastically cut. In Kembhavi's case, his modest monthly payment was hacked by almost 40 per cent.

"It was a shock, obviously. Because at this stage of your life when you want to kind of settle into a comfortable retirement … [it] shakes you to the core,' Kembhavi says.

'Gag order'

Even worse, he says, is what he and other pensioners see as a threat by APS. They were encouraged to sign a legal document releasing the pension corporation from any responsibility and to waive their right to sue or even talk to anyone about the mistake.

If the retirees refused, APS said it could go after them retroactively, to collect on the amount overpaid. For some retirees, that would add up to more than $100,000. That's why, at first, the former government employees felt they had no choice but to sign.

"They tried to put a gag order so this thing doesn't spread — people don't make a fuss … the whole thing will get hushed up," Kembhavi says.

"They are either hoping we will just shut up, run out of money or die."

Kembhavi thinks APS looked for ways to slash benefits after Alison Redford's government proposed a pension cut plan for the province.

Expense records show Karen Adams, CEO of the Alberta Pensions Services Corporation, regularly commutes from Edmonton to her home near Toronto at public expense. (Twitter)

He's outraged that APS is saving money on the backs of those who can least afford it, and he suggests the pension corporation should look for ways to save money within the organization instead.

He points to a CBC News investigation that uncovered questionable expenses linked to Alberta Pensions Services' CEO Karen Adams.

The investigation found that Adams regularly commutes, at public expense, between her home in Ontario and the APS office in Edmonton, sometimes as many as five times a month.

The pension corporation responded to the story by saying Adams's travel expenses are part of her contract and she was hired "with the full understanding" that her husband and two children would remain in Ontario.

Alberta Pensions Services denies the pension cuts were made to save money. It says it's just ensuring pensions are administered according to the rules.

Employment lawyer Janice Payne says the situation is troubling and case law is in the pensioners' favour. (CBC)

"This is about APS providing pension benefits in accordance with the terms of the closed plan as provided for in the governing legislation," APS spokesperson Gail Gravelines wrote in an email to Go Public.

The corporation wouldn't answer questions about why it asked pensioners to sign away their right to sue or talk about the pension cuts.

Lawsuit filed

At least one pensioner has filed a lawsuit. According to court documents, the former provincial employee claims his pension was cut by 75 per cent three years after retirement.

He claims he and his wife made critical life decisions based on the pension plan's calculations and he's asking the court to allow him to keep the full amount promised to him.

Kembhavi is in touch with the other retirees whose pensions were slashed. He says many want to speak out but are afraid.

Upset and scared

"They are all upset. They are scared. They are trying to fight this out. They are joining in the lawsuit that's been filed at great cost," he says.

Janice Payne is an Ottawa lawyer and an expert in employment law who has been involved in cases like this before.

She says this case is more troubling than most, because of APS's attempts to silence pensioners.

"It is an unfortunate way to proceed … if anyone signs in duress or under intimidation, the signature may not be any good."

Jay Kembhavi, a former senior government employee, was startled to learn from Alberta Pensions Services that his pension would be cut by almost 40 per cent. (CBC)

Settlement 'right thing to do'

She also says this is a battle the province will likely lose, so offering a settlement is the right thing to do — not only for pensioners — but also for taxpayers.

"We have seen a number of cases in Canada where those sorts of claims have been made successfully."

Kembhavi refused to sign any agreement, contacting Go Public instead. He hopes the newly elected NDP government in Alberta will take action to stop APS from slashing the seniors' pensions.

But his faith could be misplaced. The province would only say it's up to APS to make sure pensioners get what they are entitled to. And because this issue is now before the courts, the province says that's the only comment it would make at this time.

CBC News Investigates: Stories, videos, photos and more

Submit your story ideas

Go Public is an investigative news segment on CBC-TV, radio and the web.

We tell your stories and hold the powers that be accountable.

We want to hear from people across the country with stories they want to make public.

Submit your story ideas at Go Public.

Follow @CBCGoPublic on Twitter.