US. House committee still seeking answers on pension bailout overpayments
Republican members of a House committee are still seeking answers over the mismanagement of bailout money distributed to failing pension plans.
A Wednesday letter penned by Reps. Virginia Foxx, R-N.C., and Bob Good, R-Va., called on Attorney General Merrick Garland to provide all communications surrounding the Department of Justice’s investigation into more than 60 multiemployer pension plans that were alleged to erroneously include dead plan participants on their special financial assistance applications.
Central States Pension Fund entered a civil settlement in April to repay $127 million in overpayments it received from Pension Benefit Guaranty Corp. (PBGC), the pension insurer overseeing the distribution of bailout funds granted by the American Rescue Plan Act.
Central States, which covers Teamsters at trucking companies among other participants, received funding for roughly 3,500 dead participants. The error stemmed from PBGC’s failure to cross-check the more up-to-date Social Security Administration death records before the payments were made, Good said at a March 20 oversight hearing.
A pension fund representing graphic communications workers agreed in June to repay $8 million of improper assistance.
The House committee said it wants details on “similar improper payments” to more than 60 other pension plans.
“None of these other plans are reported to have restored the improper payments,” the letter stated. “The Committee requests information about what further action DOJ is taking to ensure that other multiemployer pension plans that received improper payments will soon be repaying these funds.”
The American Rescue Plan passed in 2021, when Vice President Kamala Harris cast the tie-breaking vote. So far, PBGC has estimated it will pay $80 billion in special financial assistance payments to 211 plans although others have estimated that as much as $100 billion could be doled out in total.
It appeared the investigation into overpayments would conclude quickly following the March 20 subcommittee hearing when then-PBGC Director Gordon Hartogensis said his agency was auditing bailout applications from other plans to make sure similar mistakes were not made.
PBGC and Central States are currently party to a legal action before a Delaware court overseeing the liquidation of bankrupt less-than-truckload carrier Yellow Corp. (OTC: YELLQ). PBGC is backing Central States’ nearly $5 billion in claims against the estate for the carrier’s abrupt withdrawal from the fund. Yellow contends Central States’ receipt of $35.8 billion in bailout money cleared the plan’s unfunded vested benefits, meaning there is no withdrawal liability. Yellow asserts that any further payment to the plan would represent a “double recovery.”
The Wednesday committee letter also referred to legislation introduced by Foxx titled the Ghost Handouts and Overpayments Stop Today Act, or GHOST Act, which would ensure PBGC and DOJ are working to recoup the overpayments.
Foxx is the chairwoman of the House Committee on Education and the Workforce.
Good is chairman of the House Subcommittee on Health, Employment, Labor and Pensions.
Requests for comment to DOJ and PBGC were unanswered at the time of this publication.
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