$127M TO THE DEAD
WH pension gaffe
Hold your horses, Joe! President Biden’s American Rescue Plan authorized $35.8 billion for a Teamsters pension scheme — but the federal agency overseeing the payments failed to prevent $127 million from going to dead participants, according to an inspector general’s report.
The Pension Benefit Guaranty Corporation’s inspector general found 3,479 deceased members received funds given to the International Brotherhood of Teamsters’ plan, a Nov. 1 memo from the office shows.
The federal agency was required to request a death audit from the plan, known as the Central States Pension Funds, but never verified the accuracy of its information before the money went out.
Central States is one of the largest multi-employer pension funds in the country and can make use of commercial vendors to perform death audits, but in a Nov. 2 statement in response to the watchdog report, the PBGC cited “limitations” on those vendors’ accuracy.
“PBGC’s final rule requires that SFA applicant plans certify the accuracy of the data, including a requirement to submit documentation of a death audit, identification of the service provider conducting the audit and a copy of the results of the audit provided to the plan administrator by the service provider,” a spokesperson told The Post.
“Pension plans don’t want to be paying out money to dead people,” PBGC watchdog Nicholas Novak told The Post but noted the agency could have consulted the Social Security Administration’s master death file to obtain the information.
PBGC denied that the payments to the dead were improper, claiming funds were never directly paid to Teamsters’ pensions — and saying it would not try to recover the funds.
‘Improper pay’
“OIG’s June 12, 2023, White Paper, ‘Searching Plan Records for Deceased Participants,’ highlighted limitations on the accuracy of commercial vendors’ death audits.
In response, PBGC promptly revised the application review process to require an independent death audit for all pending and prospective SFA applications,” PBGC’s statement read.
“PBGC has worked with the OIG to resolve the OIG’s latest recommendation to further improve that process, and the agency will implement this change, effective Nov. 1, 2023.”
But Novak pointed out the pension agency “didn’t use the tools they already had” and instead used “improper payment” as “a term of art” to claim that it had followed proper procedures.