Biden’s American Rescue Plan paid $127 million to pension plan for dead teamsters

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by josh christenson

Hold on to your horses, Joe!

President Biden’s American Rescue Plan authorized $35.8 billion for the Teamsters’ pension system, but the federal agency overseeing the payments did not allow $127 million to go to participants who died, according to the inspector general’s report. It is said that he was unable to prevent the accident.

The Pension Benefit Guaranty Corporation’s inspector general found that 3,479 deceased members received funds donated to International Brotherhood of Teamsters programs. November 1st memo From the office show.

Federal agencies were required to request death audits of the plan, known as the Central States Pension Fund, but did not verify the accuracy of that information before the funds were drained.

Central States is one of the largest multiemployer pension funds in the country and can use private vendors to conduct death audits; Statement of November 2nd In response to the watchdog’s report, the PBGC cited “limitations” in the accuracy of these vendors.

“PBGC’s final rule requires SFA applicant plans to certify the accuracy of their data, including providing documentation of death audits, verifying the identity of the service provider conducting the audit, and verifying plan management “This includes submitting a copy of the audit results provided to the person “by the service provider,” a spokesperson told the Post.

“Pension systems don’t want to pay out money to people who have passed away,” Nicholas Novak of the PBGC Oversight Committee told the Post, but the agency does not want to access the Social Security Administration’s master death file for information. He pointed out that he may have investigated.

The PBGC denies that the payments to the dead are improper, insists the funds were never paid directly into Teamsters’ pensions, and says it will not attempt to recover the funds.

“OIG’s June 12, 2023 white paper, Searching Plan Records for Deceased Participants, highlighted the limitations of accuracy in commercial vendor death audits. “In response, PBGC immediately revised its application review process to require an independent mortality audit of all pending and future SFA applications,” the PBGC statement said.

“PBGC is working with OIG to resolve OIG’s latest recommendations to further improve its processes, and the agency plans to implement this change beginning November 1, 2023.”

But Novak said the Pensions Authority “failed to utilize the tools it already had” and used “inappropriate payment” as a “technical term” to claim it had followed the proper procedures.

“They’re saying they’re not going to recover this money because it wasn’t an improper payment,” he said, adding that the PBGC promised to “fix” its death audit process going forward. “But what happens to $127 million? That’s the $127 million question.”

Novak is also auditing other plans to see if pensions were paid to additional deaths. According to Bloomberg Newsinitially reported the error.

“The PBGC has made special financial assistance (SFA) payments directly to approved multiemployer plans in accordance with the statute. The PBGC has not made payments to plan participants or deceased participants,” the spokesperson said. a representative told The Post in a statement.

“Furthermore, OIG confirmed in the OIG Closing Memo dated September 27, 2023 that special financial assistance (SFA) funds were not improperly disbursed to the plan and were not disbursed to deceased participants or beneficiaries. We agree that there is no such thing and should not be subject to recall action.”

Biden, who has billed himself as the most pro-union U.S. president in history, will send more than $80 billion to multi-employer pension plans to provide economic relief and address funding shortfalls as part of the American Rescue Plan. I signed that.

Novak further stated that there was no clawback feature available to the PBGC through the 2021 law.

The White House did not respond to requests for comment.

“Apparently, you can actually take your money to the grave, but the only catch is that you have to be compensated by the PBGC to do so,” said House Education and Labor Committee Chairwoman Virginia Foxx (R-N.C.). There is a need,” House Education and Labor Committee Chairwoman Virginia Foxx (R-North Carolina) told the Post in a statement. .

“No wonder hard-working taxpayers are feeling excruciating pain in their wallets because PBCG is cutting benefit checks to union plans for 3,500 deaths. Of course, that plan , we do not have to pay fees for deceased participants, and we do not plan to pay fees for deceased participants.”

Foxx spoke of the House committee’s “plan”[s] He said the inspector general’s report was “absolutely frightening”, saying it must be looked at what happens to the funds that were improperly allocated.

Last month, a report by taxpayer watchdog OpenTheBooks.com found that the PBGC spent nearly $15 million on new furniture (about $14,400 per 1,000 employees), even though most of its offices remained vacant. It was discovered that there had been a “gross” misappropriation of funds.

Seventeen of the 24 federal agencies are now operating at just 9% of building capacity while employees are working remotely four years after the coronavirus pandemic began, according to the government. , the maximum usage is 49%. July 2023 Government Audit Report.