The panel that oversees Virginia's public pension system voted Tuesday to rescind a $263,000 severance package given to its former chief, acting after state officials said the payment was improper.

At a special meeting, board members for the Virginia Retirement System voted unanimously to give former director W. Forrest Matthews Jr. a $15,000 exit package instead. The board said the lesser amount was all he was entitled to under the state's Workforce Transition Act. The package also includes limited health benefits and life insurance. Matthews had received the money in April and now must give it back.

The board's vote came a day after the state legislature's audit commission found that the six-figure settlement offered to Matthews in December by former board director Alfonso I. Samper was granted without the board's knowledge or approval, a violation of agency procedures. The commission's 21-page report, delivered Monday to a group of state lawmakers, also called the payment deal by Samper, now the board's vice chairman, "excessive" and said it was veiled in secrecy.

Matthews had been with the agency about three years and the $263,000 settlement was twice his annual salary.

Tuesday's action was the first time that the board took formal action on the package. Officials with the retirement system said during and after the meeting that the body had failed to monitor itself correctly during the process.

"Clearly, it's a huge wake-up call for everyone about how business is done," said Paul W. Timmreck, the board's chairman and a former Virginia's secretary of finance.

"The real problematic thing is how many separate instances of basic failure to do the right thing occurred," Timmreck said. "We've done all that we need to do to set this right."

Gov. Mark R. Warner (D), who elevated Samper to chairman in 2002, asked for his resignation Tuesday night. Warner's spokesman, Kevin Hall, said Samper's resignation would help in "restoring the trust of those public servants who depended on [the retirement system] to be responsible stewards of their retirement savings."

Samper said in an phone interview that he had not decided whether he would step down. "Obviously, I want to work with the governor," he said. "I haven't yet made a decision. I will give it the proper consideration."

Now the agency must try to recoup the money from both Matthews and the various governmental entities that may have withheld taxes and Social Security from the package. A spokeswoman for the retirement system said that the agency was trying to determine how to get the money back from Matthews.

The Virginia Retirement System, which oversees benefits for state employees, has more than 540,000 members. The country's 27th-largest system, it is valued at $43.9 billion.

In a brief interview, Matthews, a former finance director for Henrico County, faulted the board's action but said he was unsure whether he would challenge it.

"I'm the victim in all of this," he said, adding that he was on the brink of retiring when the package was offered. "I am amazed that they would consider this. This is not right."

Samper also defended his actions to the board. He said the agency's human resources personnel should be scrutinized for allowing an invalid payment.

"Where was the staff?" he asked. "What kind of internal controls do we have?"

Several board members said during the meeting that they should have been more diligent in understanding negotiations. But others pointed out that the board may not have been aware that it was necessary to do so.

"Every one of us is responsible," said Edwin T. Burton III, a board member. "But in no case has the board ever reviewed the severance [packages]. Never once."

W. Forrest Matthews Jr. isn't sure he will fight the decision.