About $127 million in federal dollars was given to a Teamsters pension plan for almost 3,500 dead people who remained on the rolls, according to a new oversight report.
Pension Benefit Guaranty Corporation insures the pension benefits of 33 million workers and retirees in private sector defined benefit pension plans. It gave the Teamsters pension, Central States, Southeast & Southwest Areas Pension Plan, $35.8 billion in Special Financial Assistance (SFA) in December 2022, funded through the American Rescue Plan Act.
While Pension Benefit Guaranty Corporation funds its programs with premiums paid by covered plans, the SFA program is funded by taxpayer dollars.
The federal funds are given to pension plans in financial distress, according to a report from the Office of the Inspector General for the Pension Benefit Guaranty Corporation.
But in this case, the pension plan had 3,479 deceased participants on its application, and Pension Benefit Guaranty Corporation won’t try to recover the funds, they told The New York Post.
The Teamsters plan was projected to run out of money in 2025 and is the largest plan expected to receive SFA. The SFA program helps multiemployer plans pay full benefits to all plan participants for 30 years, until 2051.
“While the Corporation’s review process required Central States to provide a list of all plan participants and proof of a search for deceased participants (death audit), the Corporation did not cross-check the information against the Social Security Administration’s Full Death Master File — the source recommended by the U.S. Government Accountability Office for reducing improper payments to deceased people,” the OIG report found. “Based on our identification of deceased participants, Central States calculated the value attributed to deceased participants in the SFA application at approximately $127 million.”
Since then, the Pension Benefit Guaranty Corporation has taken steps to reduce risk, including updating application instructions to include detailed guidance on how deceased participants should be handled by plans, the report stated.
If the federal government is going to bail out private pension funds, it should have better checks in place to ensure taxpayers aren’t funding payments to dead people.
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