Ranking Member Cassidy Secures $127 Million Repayment of Pension Bailout Funds Wrongfully Paid for Dead People, Calls for Further Accountability
WASHINGTON – Today, U.S. Senator Bill Cassidy, M.D. (R-LA), ranking member of the Senate Health, Education, Labor, and Pensions (HELP) Committee, secured 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). Last November, the Pension Benefit Guaranty Corporation’s (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.
Cassidy has led the charge on recouping the improperly obtained funds, making multiple demands that it be returned to American taxpayers. As a result of his efforts, PBGC is currently conducting a full census audit of 62 other pension plans that received a bailout through ARPA to determine if they too received an overpayment of taxpayer dollars.
“The previous refusal to return $127 million in wrongfully obtained funds was unacceptable. Glad to see Central States change course and rightfully return these funds back to taxpayers,” said Dr. Cassidy. “Oversight needs to continue to ensure all wrongfully paid bailout funds from the Democrats’ irresponsible bailout are returned to the American people.”
On November 1, 2023, PBGC OIG reported that PBGC did not cross-check bailout applicants’ participant lists 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 (GAO). The OIG also previously instructed PBGC that using the Full DMF is not only crucial, but essential, to “detect improper payments involving deceased beneficiaries and reduce the risk of fraud that may occur as a result of such payments.”
Under questioning from Cassidy on November 14, Teamsters President Sean O’Brien, who represents nearly 350,000 Central States retiree participants, stated that the fund should return the $127 million in taxpayer dollars if wrongfully paid. However, Central States officials refused to return the overpaid taxpayer money for months following OIG’s report, despite acknowledging that it only received the excess money because it included dead participants on its active roster.
In the face of mounting pressure from Cassidy, Central States formally asked the Departments of Labor and Treasury to provide guidance on its legal authority under the Employee Retirement Income Security Act (ERISA) to return the $127 million to the federal government. On March 14, the Department of Labor (DOL) released a statement announcing that Central States not only had the authority, but a legal obligation to return these funds. The Department of Treasury affirmed DOL’s opinion. Earlier today, Central States indicated to Committee staff that it initiated the wire transfer of these funds back to the Treasury.
Cassidy has pressed the PBGC on how it is ensuring taxpayer dollars do not fund other pension bailouts for deceased individuals. It is still unknown how much the PBGC overpaid in total to all multiemployer pension plans since Democrats passed this bailout program.
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