JIM BAIRD / Union-Tribune
Larry Grissom, head of San Diego's pension system, says the problem of posthumous payments is not widespread.
Posted on 02/04/2005 5:43:45 PM PST by NormsRevenge
The head of San Diego's pension system acknowledged yesterday the agency has inadvertently sent pension checks to retirees after they died, and he is determining exactly how much money was paid.
Administrator Larry Grissom said that since 1996 roughly 200 retirees were sent pension checks after they died. Staff members are still calculating how much is outstanding in about 63 of those cases. For the rest, Grissom said the calculations have been made, but it would take him several days to provide those figures.
The amount paid after the death of a retiree ranges from $100 to $6,000, Grissom said.
Grissom's comments follow revelations this week by pension board trustee Diann Shipione that the system has been paying untold amounts of money to deceased pensioners for years.
Shipione said in an interview that she has been researching the question of payments to dead retirees since 2003 and attributes the problem to a lack of internal controls. She believes the issue is just one symptom of a bigger problem that has led to a nearly $1.4 billion deficit in the pension system, she said.
"The people who run the (system) are so busy figuring out how to create an image of solvency when they know it's insolvent . . . that there's nobody doing the day-to-day work protecting the system's money," Shipione said.
Grissom said the pension system is working to strengthen internal procedures to prevent posthumous payments, and he disagreed with Shipione's claim that the problem is widespread.
"The statement that we are secretly paying hundreds of dead people is outrageous and totally untrue," Grissom said.
The uncertainty about how much money has been paid to deceased retirees is partly a result of the fact that computerized checks of Social Security files for deaths were not done on a consistent basis until late 2003.
The city auditor's office performed a computerized check in 1996 and in 2000, and the pension system performed one in 2001. In October 2003, the system hired a private company to do the checks on a quarterly basis.
Grissom acknowledged that it has taken some time to address the issue of deceased pensioners.
The system also learns about deaths through newspaper obituaries or notifications by relatives, labor unions or financial institutions.
Grissom said it can take 30 to 60 days after a death for the system to learn of it.
"Is it it possible in that period of time we make a payment to that person? Yes, it certainly is not at all uncommon," he said.
In some cases, he said, it can be years before the account is settled.
"We are a retirement system, and we pay people whom we have to assume are going to pass away," Grissom said.
Grissom's staff is preparing a report on payments to deceased retirees at the request of the City Council's Government Efficiency and Openness Committee. Shipione told the committee Monday that the system pays hundreds of dead people.
Some retirees present particularly tough challenges, especially when they leave behind no living relatives, Grissom said.
And technology has actually made the system's job harder, not easier, he said. In 1999, the system started depositing pension checks directly into retirees' bank accounts, rather than issuing a check, in most cases. That took away a paper trail that could be used to track down people who might be improperly cashing dead retirees' checks, Grissom said.
In 1996, the city auditor for the first time performed a computerized check in which the Social Security numbers of all its retirees were compared against a federal database of known dead people. That turned up few discrepancies.
More computerized checks were deemed unnecessary until 2000, Grissom said. That was one year after direct deposit was initiated, and a computer check revealed gaps in the internal oversights of the system.
"That was a trigger for us to firm up our internal procedures," Grissom said.
There are also cases where the system finds itself owing money to people after they died, even if those people received posthumous checks. For example, that can occur when the amount of the checks is less than the standard $2,000 death benefit paid to the relatives of the deceased upon closing of the account.
Lori Chapin, general counsel for San Diego City Employees Retirement System, sent a letter Wednesday to the open government committee's chairwoman, Councilwoman Donna Frye, criticizing her panel for discussing several items Monday that were not listed on its meeting agenda, including the deceased pensioners.
Chapin called it "ironic" that Frye's open-government committee did not follow the state's open-meeting law. She said it's "sensational and untrue" for Shipione to allege that the pension system "was secretly paying hundreds of dead people" and has an insufficient process to monitor for deceased retirees.
Yesterday, Frye denied her committee violated the open-meeting law, known as the Ralph M. Brown Act, and called Chapin's letter "comical."
"Diann Shipione was invited to testify and tell her story about (being excluded from closed-session pension board meetings)," Frye said. "In the course of her explaining what had happened to her, she raised other issues."
Larry Grissom, head of San Diego's pension system, says the problem of posthumous payments is not widespread.
Wouldn't it be a crime to accept a check made out to a dead person?
Are Grissom et al vigorously going after the criminals?
I was the executrix of my late brother-in-law's will and it took me three months to get the government to cancel his food stamps. They kept wanting him to come in personally. I finally went down and convinced them very loudly that he'd been cremated three months earlier and could not come in ... but I wouldn't be surprised if a lot of people just gave up and kept on getting the stamps.
It shouldn't be a problem! After all, they were still voting for the Democrats.
It shouldn't be a problem! After all, they were still voting for the Democrats.
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Exactly. Probably more than one time too !!!
I wonder how much this happens within the Social Security system. I imagine thousands of times every year. I would imagine that some people have seen checks from SS for many years that do not belong to them?
Great point.
Grissom should know about dead people. He's been solving murders murders on CSI for about 5 years now...oh wait, wrong Grissom. :-P
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