Pension Payments for Some Government Workers Continued After Death
An investigation by the Chicago Sun-Times and the Better Government Association finds that pension funds for government workers are continuing to pay benefits to some retirees long after the retiree and their spouse have died.
Chris Fusco, one of the lead investigators on the story, breaks it down for us.
The scope of the problem in Illinois
“The numbers aren’t exactly staggering,” Fusco said. "These are the $2.2 million we’ve been able to find and [the pension funds are] accounting for. What we found in our investigation is that 11 of the 15 [pension funds] had that $2.2 million paid to dead people. The top payment was about $203,000 out of the municipal fund to a retired city truck driver. And we actually discovered an arrest that had happened of a woman who had stolen her dead mother’s pension money for about five years.”
“What’s difficult to quantify about this issue is people are constantly coming on the pension rolls and they’re constantly dying. We decided the most fair way to do it would be to focus on dead pensions. There are thousands of payments that go out a year, not only for dead pensions but also people on disability,” he said. “What we were trying to quantify is the amount of dollars still being chased, not the amount of dollars that went out.”
Getting access to the pension
“It actually has to do with technology which has improved things for most of us—it’s a direct deposit. So every month on the first of the month or X day of the month, the direct deposit goes in for a pensioner,” Fusco said. “That pensioner passes away. Their survivor, their widow or widower inherits that pension. They pass away. Now all of a sudden the money keeps going in. If somebody decides not to report the death or forgets to and the pension fund doesn’t catch that, then that money keeps going in indefinitely until something triggers it—a return piece of mail, an estate account being closed–things like that.”
Finding out pension fund recipient has died
“What these funds do is they pay outside companies a few thousand dollars a year to run their log of pensioners against the Social Security Death Index, and what we heard from a lot of people in the pension funds is this is not a foolproof method because there’s no standard way in 2015 in the United States to report a death,” he said. “All states do it differently, and the Social Security index only includes three-quarters of the state.”
“I don’t understand why there can’t be a federal law or federal system set up where once a county coroner or county medical examiner issues a death certificate that there’s some sort of database entered into and it notifies a federal database and things can be run,” he said.
Note: Discussion highlights have been condensed.