Federal retirement benefits can be overpaid for years when the death of a retiree goes unreported, in some cases so long that statutes of limitations apply, a report from the inspector general at the Office of Personnel Management says.
“One of the most common causes of improper payments is failure to verify the deaths of annuitants, which sometimes allows improper payments to continue for years and costs tens of thousands of dollars. Fraud by forged documents, identity theft, and other schemes also highlight program vulnerabilities, and in some cases may stop federal retirees or rightful annuitants from receiving their deserved benefits,” it said.
The IG cited two cases it investigated in 2020, one of which involved a retiree who had died in 1988 but for whom annuity payments continued into 2012, for an overpayment of about $130,000. “Our investigation found minimal activity until October 2014, when suspicious activity on the account began. However, because the last payment to the deceased survivor annuitant was made in January 2013, the statute of limitations expired,” and the IG could do no more than refer the case to OPM to attempt collection
A second case involved a retiree who had died in 1994 but for whom annuity payments of about the same amount had been made into 2010, plus nearly $150,000 in health benefit premiums. OPM was unable to collect the overpayments and statute of limitations prevented prosecution, the report said.
Other cases of unreported deaths cited by the IG did involve court action and/or at least partly successful collections of overpayments for ranging as high as about $237,000 over periods as long as 10 years.
That office has issued a number of reports in recent years calling attention to potential fraud in payment of retirement and insurance benefits, including for the latter coverage of persons who are ineligible.