Press Releases

WASHINGTON – Today, Education and the Workforce Committee Chairwoman Virginia Foxx (R-NC) and Health, Employment, Labor, and Pensions Subcommittee Chairman Bob Good (R-VA) sent a letter to Pension Benefit Guaranty Corporation (PBGC) Director Gordon Hartogensis. The letter comes after PBGC failed to provide an adequate response to the Committee’s January 16 letter requesting answers for the agency’s refusal to recover $127 million in taxpayer money it recklessly sent to the Central States Pension Fund to pay for non-existent pensions of deceased participants. 
 
In the letter, Foxx and Good write: “The Committee on Education and the Workforce (Committee) is continuing its investigation into the Pension Benefit Guaranty Corporation’s (PBGC) failure to safeguard taxpayers’ money by overpaying $127 million to a multiemployer pension plan corresponding to deceased participants. When we wrote to you last month, we were hopeful that PBGC would take responsibility for its grave lapse in judgment and respond in a forthright manner. However, PBGC’s February 9, 2024, response both failed to address these concerns and to provide responsive materials. With this letter, we insist that PBGC provide information responsive to the Committee’s investigation.”
 
The lawmakers continue: “PBGC’s February 9 response made no attempt to explain how it justifies making payments beyond the amount authorized under the American Rescue Plan Act (ARPA) or why it is failing to take any steps to recoup those overpayments. Because PBGC did not provide an adequate response, it appears PBGC fails to recognize that its overpayments need to be rectified and suggests a total disregard for taxpayer dollars.” 
 
The lawmakers conclude by requesting responses to the following inquiries: 

• Explain what legal justification PBGC has for paying out taxpayer funds in excess of the amount authorized by ARPA.
• Provide the steps PBGC has taken or plans to take to quantify similar overpayments already paid to other multiemployer pension plans.
• Did PBGC ask plans that received special financial assistance (SFA) overpayments if they would return the funds? Why or why not?
• PBGC has stated that it plans to make changes to the SFA application process: 
  • Does PBGC intend to suspend the approval of SFA applications until it can implement changes to SFA application instructions that would allow PBGC to conduct an independent death search to ensure that it does not attribute funds to plans based on deceased participants? If not, why not?
  • Will PBGC compare census data for all pending applications with the Social Security Administration Death Master File before paying further SFA? If not, why not?   
• PBGC’s response letter to the Office of Inspector General (OIG) cites “PBGC Legal Analysis dated June 30, 2023” when PBGC suggests that the funds described in the OIG report were properly paid and should not be subject to recovery actions.
  • Provide the “PBGC Legal Analysis dated June 30, 2023” and any supporting documentation that led PBGC to reach the conclusion that the funds described in the OIG report were properly paid and should not be subject to recovery actions.
  • The OIG’s closure memo indicates that the OIG needed to consult the Office of Management and Budget (OMB) for additional information. Did OMB provide PBGC with technical assistance regarding payment integrity or compliance with OMB Circular A-123, Appendix C, in the development of its SFA rules? If so, provide all technical assistance documents and communications regarding SFA payment integrity or compliance with OMB Circular A-123, Appendix C, including but not limited to technical assistance documents and communications between PBGC, PBGC’s Board of Directors (or their representatives), and OMB.
• In light of Sean O’Brien’s comments highlighted in our January 16, 2024, letter, do you agree that funds provided to the Central States Pension Fund should be refunded to PBGC if the Central States Pension Fund was not entitled to them? Why or why not?

BACKGROUND 
 
January 16, 2024: Chairwoman Foxx and Rep. Good sent a letter to PBGC Director Gordon Hartogensis demanding answers after the agency refused to recover the $127 million in taxpayer money mistakenly sent to fund pensions for at least 3,479 deceased participants.
 
January 30, 2024: Chairwoman Foxx introduced H.R. 7135, the Ghost Handouts and Overpayments Stop Today Act (GHOST Act), to recoup pension bailout money sent for dead people and to increase oversight of the pension system.
 
To read the full letter, click here.

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