Ranking Member Cassidy Demands Return of $127 Million in Taxpayer Funds Wrongfully Paid to Dead People as Part of Democrats’ Pension Bailout

WASHINGTON – U.S. Senator Bill Cassidy, M.D. (R-LA), ranking member of the Senate Health, Education, Labor, and Pensions (HELP) Committee, demanded the return of $127 million in taxpayer funds that were wrongfully paid to the Central States Pension Fund as part of the Democrats’ $90 billion pension bailout included in the American Rescue Plan Act (ARPA). The Central States Pension Fund is primarily made up of the Teamsters union members and retirees. Cassidy also pressed the Pension Benefit Guaranty Corporation (PBGC) on whether other pension funds improperly received taxpayer dollars due to listing dead people on their bailout application. This comes as the HELP Committee is holding a hearing this Wednesday on the state of American pension plans.  

Last November, the PBGC Office of Inspector General (OIG) published a report disclosing that the PBGC overpaid the Central States fund by $127 million after the plan included at least 3,479 dead participants in its bailout request. According to the PBGC OIG, the PBGC’s review process did not require it to cross-check the plan’s participant list with the Social Security Administration’s (SSA) Full Death Master File (Full DMF), despite this practice being recommended as a standard procedure by the Government Accountability Office. As far back as 2018, the OIG also instructed PBGC that using the Full DMF is not only crucial, but essential, to prevent overpayments of annuities to people who are already dead. 

Under questioning from Cassidy in November, Teamsters President Sean O’Brien, who represents nearly 350,000 Central States retiree participants, stated that the fund should return $127 million in taxpayer dollars that were wrongfully paid to it. However, Central States officials have failed to return the overpaid taxpayer money, despite acknowledging that it only received the money because it included dead participants on its active roster.  

Cassidy has requested that PBGC use its authority under regulations enacted pursuant to section 4262 of the Employee Retirement Income Security Act to claw back the overpaid funds from the Central States. However, PBGC has refused to do so. It is still unknown how much the PBGC has overpaid in total to all multiemployer pension plans since Democrats passed this bailout program. 

Cassidy called on Central States to return funds that were wrongfully obtained to American taxpayers. Additionally, Cassidy is demanding answers from PBGC on why it has failed to claw back the money from Central States, and how they are ensuring taxpayer dollars do not fund other pension bailouts for deceased individuals.   

Earlier this year, Cassidy introduced legislation requiring that PBGC recover, on behalf of American taxpayers, overpayments to pension funds paid through the Democrats’ ARPA pension bailout, including the $127 million. It also requires further verifications for future pension bailout applications by cross-checking plan participation lists against the Full DMF.  

Read the letter to Central States here and PBGC here.

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