Lawmakers blast federal payments to deceased Americans

Two House lawmakers blasted a federal program this week for sending over $100 million to deceased Americans.

The lawmakers sent the letter to the Pension Benefit Guaranty Corporation Director Gordon Hartogensis after money given to his federal group under the American Rescue Plan Act was misspent.

Education and the Workforce Committee Chairwoman Virginia Foxx, R-N.C., and Health, Employment, Labor, and Pensions Subcommittee Chairman Bob Good, R-VA., led the letter.

According to the lawmakers, $127 million went to the Central States Pension Fund, taxpayer dollars that were paid out for people who are no longer alive.

Now the issue is under investigation, but the lawmakers said that the agency has not explained how the overpayments happened or done enough to recover them.

"Because PBGC did not provide an adequate response, it appears PBGC fails to recognize that its overpayments need to be rectified and suggests a total disregard for taxpayer dollars," the letter said.

The Education committee is investigating the overpayments and said the answers provided so far have not been adequate.

The letter seemed to suggest that the next step in the investigation could be forcing agency officials to testify.

"The Committee on Education and the Workforce (Committee) is continuing its investigation into the Pension Benefit Guaranty Corporation's failure to safeguard taxpayers' money by overpaying $127 million to a multiemployer pension plan corresponding to deceased participants," the letter said. "When we wrote to you last month, we were hopeful that PBGC would take responsibility for its grave lapse in judgment and respond in a forthright manner. However, PBGC's February 9, 2024, response both failed to address these concerns and to provide responsive materials. With this letter, we insist that PBGC provide information responsive to the Committee's investigation."

PBGC released a statement Monday in response to the committee's letter.

"The Special Financial Assistance Program, established under the American Rescue Plan Act of 2021 , provides funds to severely underfunded multiemployer pension plans that were facing insolvency and ensures that millions of workers, retirees, and their families receive the pension benefits they earned through many years of hard work," the group said.

PBGC said it is now incorporating "the results of the expanded Social Security Administration Death Master File cross-checking of the plan's census data."

The group added it is working with the federal watchdog that oversees it to improve accuracy.

"With respect to SFA approvals made before that date, PBGC supports repayment of any material SFA amount that was paid based on inaccurate census data and continues to explore any potential mechanism for recovery with executive branch partners, including the Civil Division of the U.S. Department of Justice," the group said. "PBGC would also support legislation to enhance its recovery authorities for the SFA program."