The Teamsters pension fund returned $127 million in overpayments to the US Treasury this week — months after an internal investigation revealed the kitty had nearly 3,500 dead members.
Thomas Nyhan, the executive director of the Central States Pension Fund, which handles retirement benefits for the International Brotherhood of Teamsters, announced the repayment on Monday as part of a civil settlement with the DOJ.
Records related to the snafu had been expected Tuesday in response to a congressional subpoena.
In December 2022, the Pension Benefit Guaranty Corporation paid a total of $35.8 billion to the Teamsters’ pension plan as part of special financial assistance funds provided through President Biden’s American Rescue Plan.
But PBGC’s Office of Inspector General in November revealed that roughly $127 million of those funds went out the door before Central States checked how many of its 360,000 participants were deceased — 3,479, as it turned out.
The disclosure led to probes by House and Senate Republicans into the erroneous payments, with House Education and Workforce Committee chairwoman Virginia Foxx (R-NC) issuing a subpoena to PBGC last month.
International Brotherhood of Teamsters president Sean O’Brien also said that Central States should “refund” any overpayments during a November 2023 congressional hearing, when pressed by Sen. Bill Cassidy (R-La.).
Foxx gave the agency an April 9 deadline to hand over documents — only for the the Justice Department to announce that a settlement had been reached after PBGC and Central States cooperated with a joint investigation.
“PBGC-OIG is committed to conducting investigations, audits and other work to strengthen the public trust in government operations,” said PBGC Inspector General Nicholas Novak in a statement.
“Today’s settlement ensures that Central States will return approximately $126.5 million to the United States Treasury, and demonstrates that the partnership between the PBGC-OIG and the Justice Department provides a critical mechanism to protect taxpayer funds.”
PBGC Director Gordon Hartogensis said in a statement of his own that the agency was “also working with other plans to recover any [Special Financial Assistance] funds paid out because of inaccurate census data.”
“The settlement confirms that Central States applied for and received SFA funds before November 1, 2023, when PBGC updated its SFA application instructions to require submission of participant census data, which enabled PBGC to begin conducting independent death audits using the Social Security Administration Full Death Master File (Full DMF),” Nyhan added.
“The settlement also confirms that Central States did not have access to the Full DMF before, during or after submission of its SFA application,” he said.
Foxx vowed on Tuesday that her “committee’s investigation into PBGC doesn’t end here.”
“For months, the agency dragged its feet in addressing this error. And the same error may have affected special financial assistance sent to more than 60 other multi-employer pension plans,” she said.
“It’s critical that we continue our investigation to understand how this error occurred in the first place and why PBGC initially took the position that the money should not be recovered.”
Cassidy added that he was “glad to see Central States change course” but “oversight needs to continue to ensure all wrongfully paid bailout funds from the Democrats’ irresponsible bailout are returned to the American people.”
PBGC initially rejected that the funds had been “improperly paid” to plans and blamed independent vendors for “limitations” in providing accurate death audits.
Foxx and Cassidy, who serves as ranking member of the Senate Health, Education, Labor and Pensions Committee, both pointed out that PBGC’s inspector general urged the agency as early as 2018 to consult the Social Security Administration’s master death file to guard against wrongful payments.
Foxx and Rep. Bob Good (R-Va.), who serves as chairman on the House Health, Employment, Labor, and Pensions Subcommittee, also accused Central States in a Jan. 16 letter of preparing to use the overpayments “as their personal slush fund” to “achieve its statutory objective of remaining solvent through 2051.”
“With respect to other plans that received SFA before PBGC expanded the scope of its independent death audit, PBGC has full census data audits underway,” the agency said in a statement on Monday. “PBGC is committed to facilitating the return of SFA amounts made to those plans based on inaccurate census data.”
Biden, 81, who has called himself the most pro-union president in US history, authorized more than $80 billion through the American Rescue Plan to multi-employer pension plans to grant financial relief and help shore up funding.
The Justice Department did not immediately respond to a request for comment.
