The Teamsters pension fund, managed by the Central States Pension Fund, returned $127 million in overpayments to the US Treasury following an internal investigation that revealed nearly 3,500 deceased members in the fund. In December 2022, the Pension Benefit Guaranty Corporation provided $35.8 billion to the Teamsters’ pension plan under President Biden’s American Rescue Plan, but it was later discovered that $127 million was paid out before verifying the status of participants.
House and Senate Republicans launched investigations into the erroneous payments, with House Education and Workforce Committee chairwoman Virginia Foxx issuing a subpoena to PBGC. Teamsters president Sean O’Brien also suggested Central States should refund any overpayments during a congressional hearing. Ultimately, a settlement was reached between PBGC, Central States, and the Justice Department, resulting in the return of approximately $126.5 million to the Treasury.
PBGC Director Gordon Hartogensis announced plans to recover any Special Financial Assistance funds paid out due to inaccurate census data and mentioned that Central States did not have access to the Full Death Master File before submitting its SFA application. Foxx stated that her committee’s investigation into PBGC would continue, expressing concern over possible errors affecting other multi-employer pension plans and the need for accountability in the recovery of wrongly paid funds.
PBGC initially denied that the funds had been improperly paid and attributed limitations in accurate death audits to independent vendors. Lawmakers highlighted recommendations made by PBGC’s inspector general in 2018 to consult the Social Security Administration’s master death file to prevent wrongful payments. They accused Central States of planning to use the overpayments as a “personal slush fund” to secure solvency through 2051 and emphasized the need for ongoing oversight to ensure returned bailout funds.
President Biden authorized over $80 billion in financial relief for multi-employer pension plans through the American Rescue Plan as part of his support for unions. The Justice Department did not provide immediate comment on the situation. The settlement between PBGC, Central States, and the Justice Department underscored the partnership’s role in protecting taxpayer funds and ensuring that erroneous overpayments were returned to the Treasury. Foxx and Cassidy called for continued oversight to safeguard against similar errors and ensure accountability in the recovery process.
