Pension Benefit Guaranty Corporation Under Fire for $127 Million in Misspent Funds

Washington, D.C. – The Biden administration is now facing a congressional investigation after the Pension Benefit Guaranty Corporation (PBGC) distributed $127 million to deceased participants in a Teamsters’ pension fund, failing to stop the payments. The House Education and Workforce Committee sent a letter demanding records related to the agency’s “mismanagement” and “overpayment” to the union pension plan.

Chairwoman Virginia Foxx and Subcommittee on Health, Employment, Labor and Pensions Chairman Bob Good wrote in the letter, “Taxpayers rightfully expect agencies like PBGC to take the necessary measures to ensure that their funds are protected and spent wisely. Instead, PBGC’s reckless disregard of prudent steps is a case study of waste and abuse.”

A Nov. 1 memo from PBGC’s Office of Inspector General found the International Brotherhood of Teamsters’ pension fund received money for 3,479 dead members out of $35.8 billion allocated from President Biden’s 2021 American Rescue Plan. The federal auditor revealed that PBGC failed to consult the Social Security Administration’s Full Death Master File (DMF) before distributing the dollars to the Teamsters’ Central States Pension Fund, one of the largest multiemployer plans in the nation.

In response to the memo, PBGC blamed “limitations” of some of its vendors’ accuracy for the flub, stating it would not try to recover any funds since none were paid directly to individual pensions. However, House Education and Workforce Committee members have raised concerns that PBGC’s mismanagement could cast doubt on the organization’s implementation of the larger $91 billion Special Financial Assistance (SFA) program.

International Brotherhood of Teamsters President Sean O’Brien told lawmakers in a Nov. 14 hearing that he “assumed” the government would recoup any misspent funds. Foxx and Good also mentioned in their letter that the Central States Pension Fund had implied it would use the money “as their personal slush fund” to help it “achieve its statutory objective of remaining solvent through 2051.”

Inspector General Nicholas Novak previously told The Post that there was no clawback function available to PBGC as part of the American Rescue Plan, through which the Biden administration provided more than $80 billion to other multi-employer pension funds.

As the panel members have asked for documents and answers to their questions on the matter to be returned by Jan. 30, a spokesperson for PGBC previously denied that the agency “improperly” paid any funds to pension plans and that no deceased participants were immediate beneficiaries.

The PBGC has not immediately responded to a request for comment, signaling that the congressional probe into the mismanagement and overpayment issue is still ongoing.