House probe after $127M paid to dead Teamsters’ pension plan
The Biden administration is facing a new congressional probe after an agency that distributed tens of billions of dollars from the American Rescue Plan failed to stop $127 million from going to deceased participants in a Teamsters’ pension fund.
The House Education and Workforce Committee sent a letter on Tuesday to the Pension Benefit Guaranty Corporation (PBGC), demanding records related to the agency’s “mismanagement” and “overpayment” to the union pension plan, according to a copy of the missive exclusively obtained by The Post.
“As part of this investigation, the Committee requests documents and information relating to PBGC’s disbursal of these payments and its plan to recoup these significant taxpayer funds,” Chairwoman Virginia Foxx (R-NC) and Subcommittee on Health, Employment, Labor and Pensions Chairman Bob Good (R-Va.) wrote.
House Education and Workforce Committee Chairwoman Virginia Foxx (R-NC) is probing the Pension Benefit Guaranty Corporation (PBGC) “overpayment” to a Teamsters’ pension plan. CQ-Roll Call, Inc via Getty Images
“Taxpayers rightfully expect agencies like PBGC to take the necessary measures to ensure that their funds are protected and spent wisely. Instead, PBGC’s reckless disregard of prudent steps is a case study of waste and abuse. The Committee intends to conduct robust oversight of PBGC’s negligence, including possible testimony before the Committee.”
A Nov. 1 memo from PBGC’s Office of Inspector General found the International Brotherhood of Teamsters’ pension fund received money for 3,479 dead members out of $35.8 billion allocated from President Biden’s 2021 American Rescue Plan.
The federal auditor revealed that PBGC failed to consult the Social Security Administration’s Full Death Master File (DMF) before distributing the dollars to the Teamsters’ Central States Pension Fund, which includes almost 350,000 members and is one of the largest multiemployer plans in the nation.
The Biden administration distributed tens of billions of dollars to the agency through the American Rescue Plan — but it failed to stop $127 million from going to deceased Teamsters’ funds. REUTERS
The agency blamed “limitations” of some of its vendors’ accuracy for the flub in a Nov. 2 statement responding to the memo — and said it would not try to recover any funds since none were paid directly to individual pensions.
“As far back as 2018, PBGC’s OIG has instructed PBGC that using the DMF is essential to prevent overpayments as a result of funding annuities for dead people,” Foxx and Good said in their Jan. 16 letter. “PBGC’s failure to incorporate the DMF is inexcusable.”
“Amazingly, in its response to the report, PBGC asserted that this payment ‘should not be subject to recovery actions,’” they added. “In the same vein, the Central States Pension Fund claims it neither owes nor intends to pay back these taxpayer dollars. By all appearances, PBGC intended to shift taxpayer dollars to the Central States Pension Fund in an unauthorized windfall and refuses to get this money back.”
PBGC’s Office of Inspector General found the Central States Pension Fund received money for 3,479 dead members out of $35.8 billion allocated from President Biden’s American Rescue Plan. AP
In a Nov. 14 Senate Health, Education, Labor and Pensions Committee hearing, International Brotherhood of Teamsters President Sean O’Brien told lawmakers he “assumed” the government would recoup any misspent funds.
“I’ll go on record as saying if someone was given something that they weren’t entitled to, they should refund it,” O’Brien added.
Foxx and Good also said the “mismanagement casts doubt on PBGC’s implementation of the larger program, the $91 billion Special Financial Assistance (SFA) program,” saying Central States had sent a follow-up letter to the inspector general’s office that implied it would use the money “as their personal slush fund” to help it “achieve its statutory objective of remaining solvent through 2051.”
International Brotherhood of Teamsters President Sean O’Brien told lawmakers he “assumed” the government would recoup any misspent funds. REUTERS
Inspector General Nicholas Novak previously told The Post that there was no clawback function available to PBGC as part of the American Rescue Plan, through which the Biden administration provided more than $80 billion to other multi-employer pension funds.
The panel members have asked for documents and answers to their questions on the matter to be returned by Jan. 30.
A spokesperson for PGBC previously denied that the agency “improperly” paid any funds to pension plans and that no deceased participants were immediate beneficiaries.
Reps for PBGC did not immediately respond to a request for comment.
