State auditors reported Thursday that a chronic failure to collect adequate contact information led to at least one teacher’s pension going uncollected for five years after a retiree’s death, denying an unnamed beneficiary $192,000. The state never searched for the beneficiary.
In a letter to Gov. Dannel P. Malloy, Auditors Robert M. Ward and John C. Geragosian also wrote they fear other beneficiaries have not received funds because of one agency’s longstanding failure to collect sufficient contact information.
But the executive director of the state Teachers’ Retirement Board, Darlene Perez, said she doesn’t believe the problem is widespread. Perez also said that while the agency had failed for years to collect certain contact information for retired teachers’ designated beneficiaries, it changed that practice last week.
“We noted one such case in which approximately $192,000 of accumulated contributions were on hand for one deceased plan member’s designated beneficiary,” Ward and Geragosian wrote. “The plan member died in 2009 and, as of April 2014, no attempts had been made to contact the designated beneficiary who is due this amount.”
The auditors didn’t identify either the deceased teacher who had earned these benefits, or the designated beneficiary who never received them.
The auditors discovered this problem during a regular audit of the retirement board that began in January. That report isn’t completed yet. But state law requires the auditors to notify the governor immediately upon discovery of certain extreme irregularities.
“As required by statute, our office was notified of the situation at the Teachers Retirement Board. Obviously, the Governor is concerned by the findings,” Malloy spokesman Andrew Doba said Thursday. “He will be drafting a letter to the commission in the near term asking for a full accounting of the problem.”
The state administers a pension fund for public school teachers. That fund held over $13.7 billion as of its last actuarial valuation. And more than $1.5 billion in total was paid out last year to more than 32,000 retired teachers or their beneficiaries.
The auditors did not track all of those payments in their review, but discovered the five-year-overdue-payment by studying a random sample of cases.
This review disclosed that while the retirement board had been gathering extensive contact information from teachers, it only had been collecting names and Social Security Numbers for those teachers’ designated beneficiaries.
And though most of these beneficiaries involve a teacher’s spouse or other family member, the plan does not require that beneficiaries be relatives.
A beneficiary also might be a family member when first registered with the plan and then – as in the case of divorce – move into a different household.
Still, Perez said most beneficiaries are aware of their status. She estimated there are between one and two dozen cases of unassigned benefits – involving about $1.5 million in total payments.
The president of the Association of Retired Teachers of Connecticut, Thomas W. Singleton, said Perez is “a very conscientious person,” but added that his group has been increasingly concerned about the need for more staffing and better technology at the state agency.
Singleton’s group has 7,000 members and is affiliated with 15 other groups that together represent more than 30,000 retired teachers.
Perez said that “our resources are at an extreme low. Updated software certainly would help.”
She added that the retirement board also would subscribe to an online people-finder service that can help locate individuals using their Social Security Numbers.