Treasurer Mistake Causes Dead Woman to Receive $73K in Postmortem Pensions

An unreported death cost Wilmington, Delaware, 20 years’ worth of unnecessary spousal benefit payments.

The Wilmington, Delaware, treasurer’s office has been paying spousal pension benefits to a woman more than 20 years after her death, a recent audit revealed.

According to a city audit, the Wilmington treasurer paid spousal benefits—a total of nearly $73,000—to an unnamed woman from 1974 until this year, when the office learned that she had died in 1997. According to Delaware Online, Social Security records did not document her death two decades prior, leading to an additional $72,966.60 in postmortem payments.

To cross-check Social Security and death records with pensioner information, the city was using third-party vendor Comserv on a semi-annual basis for roughly 20 years until they recently went out of business. Wilmington has since been using another contractor that allows the treasurer’s office to check Social Security information more frequently.

There are several ways the treasurer’s office can learn of a benefits recipient’s death. The office regularly checks newspapers for death notices, families will call the city to inform them of a person’s passing, or mail is returned.

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“They usually have some way of knowing, but they never got returned mail for this person. There was no indication that the person was dead,” acting City Auditor Tamara Thompson told Delaware Online. “This happened to be an anomaly. If it’s not reported, then it’s nearly impossible to detect.”

Whether the city will get the payments back is the hands of the law department, according to City Treasurer Velda Jones-Potter. The city did not indicate whether is currently pursuing or planning to pursue a criminal investigation into the matter.

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NY State Employer Pension Contribution Rates to Drop

Comptroller says strong investment returns are keeping rates stable.

New York State Comptroller Thomas DiNapoli said that employer contribution rates for the New York State and Local Retirement System (NYSLRS) will decrease in fiscal year 2018-19 due to recent strong investment returns.

The Comptroller’s Office said the estimated average contribution rate for the Employees’ Retirement System (ERS) will decrease to 14.9% of payroll from 15.3% of payroll. Meanwhile, the estimated average contribution rate for the Police and Fire Retirement System (PFRS) will decrease to 23.5% of payroll from 24.4%.

“We’ve had strong recent investment returns that have helped keep rates stable,” DiNapoli said. “Stable rates are very important to our employers and provide the predictability they need to plan for their future budgets.”

The New York State Common Retirement Fund earned an estimated 11.42% on investments during the fiscal year ending March 31, which easily surpassed its long-term expected rate of return of 7%, and ended the year with an estimated value of $192 billion.

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Employer rates are determined based on actuarial assumptions recommended by the retirement system’s actuary and approved by DiNapoli. The Comptroller’s Office said that in 2015, the actuary conducted a review of the systems’ economic and demographic experience for the prior five years. The actuary proposed assumptions and methods for the actuarial valuations, which were adopted by DiNapoli. Based on that report, DiNapoli lowered the assumed rate of return in 2015 from 7.5% to 7%. The median assumed rate of return among public pension funds is 7.52%, according to a February brief issued by the National Association of State Retirement Administrators.

There are more than 3,000 participating employers in ERS and PFRS, and 335 different plan combinations. Payments based on the new rates are due by Feb. 1, 2019, but may be pre-paid by Dec. 15, 2018.

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