After reading the Sept. 13 Sun-Times story “Pensioners die, but retirement pay keeps coming,” the public could easily conclude, incorrectly, that Teachers’ Retirement System is not paying attention or doesn’t care about retirement benefits mistakenly paid to retirees that have died.
The truth is there is no scandal regarding these “overpayments.” At TRS, we pursue repayment, by whatever means necessary, of every dime that is mistakenly paid out. TRS is required to seek reimbursement for any and all overpayments in order to maintain our qualified status as a retirement plan with the IRS.
The reporting of deaths to TRS, whether from the government or from other sources, is not perfect. Of course there are rare cases where a family hides a death to continue collecting a benefit that they then skim off. But the more common reality is that people who die don’t tell us in advance and their families often neglect (or don’t know how) to inform us as they wrap up the affairs of their loved ones.
As a result, all pension systems will always have overpayment balances that they are in the process of collecting.
The story also did not include all the data provided to your reporting team; data that would put the amount of overpayments being pursued in a proper perspective. If all overpayments were repaid tomorrow, TRS would still face the significant financial problem of a $61 billion unfunded liability. Also, the $513,087 in TRS overpayments the Sun-Times identified is 0.01 percent of the $5 billion TRS pays out every year in pensions and benefits.
Every dollar is important at TRS because the System has been serially underfunded for decades by state government. But a story like this only deflects attention away from the real issue and real solutions.
Teachers’ Retirement System
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