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State pension plans must start identifying deceased recipients

VILLA PARK – State pension plans have until Jan. 1, 2017, to develop and implement a process to identify deceased pension recipients each month.

The initiative to eliminate government waste, House Bill 6030, was sponsored by State Sen. Tom Cullerton, D-Villa Park, and recently signed into law by the governor.

Cullerton said that between 2010 and 2014, 11 of Illinois’ 15 major government pension funds made $2.2 million in payments to more than 1,000 dead people.

Retirement systems do not know a definite amount of pension payments made to deceased annuitants because each pension fund tracks death-related overpayments differently.

This new law will give state pension funds until Jan. 1, 2017, to implement a process to identify deceased recipients at least once a month. The process can include using a third-party company, Social Security Administration data or other available data, as well as any other method that is commonly used by other state retirement systems.

The Better Government Association, a Chicago-based government watchdog organization, expressed support for the new law.

“With this new law, Illinois has taken a strong step toward eliminating abuse and reducing fraud,” BGA policy coordinator Judy Stevens said. “By requiring state funds to regularly identify pension recipients who have passed, the law could ultimately result in saving millions of dollars for Illinois woefully underfunded retirement systems.”

The law is now in effect.

— From the Illinois Business Journal

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