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Ranking Member Cassidy on Official Determination that Central States Must Return $127 Million Wrongfully Paid for Dead People

WASHINGTON – Today, U.S. Senator Bill Cassidy, M.D. (R-LA), ranking member of the Senate Health, Education, Labor, and Pensions (HELP) Committee, released a statement following the Biden administration instructing Central States Pension Fund to return the $127 million that it was wrongfully paid as part of the Democrats’ $90 billion pension bailout. This comes after Cassidy’s repeated demands to the Biden administration to claw back this funding.  

“The $127 million was wrongfully paid out and needs to be returned to the American people,” said Dr. Cassidy. “There should be no more delays. Central States must return this money immediately.” 

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 did not 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 (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 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 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 if it has the legal authority under the Employee Retirement Income Security Act (ERISA) to return the $127 million to the federal government. On March 14th, the Department of Labor (DOL) released a statement announcing that Central States not only had the authority, but is legally obligated to return these funds. The Department of Treasury affirmed DOL’s opinion.   


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