Preventing Fraud In Federal Retiree Payments

March 9, 2020 9:24 AM
View this article online at https://www.fedsmith.com/2020/03/09/preventing-fraud-federal-retiree-payments/ and visit FedSmith.com to sign up for free news updates
Businessman touching his finger on the screen on a button labeled 'fraud prevention'

It took several years but the Representative Payee Fraud Prevention Act has passed Congress and has been sent to the President for his signature. The bill is designed to prevent fraud for payments made under either the CSRS or FERS retirement system to “representative payees.”

A representative payee is a person or organization designated to receive payments for a minor or an individual who is mentally incompetent or under other legal disability.

This legislation will give US Attorneys statutory authority to prosecute representative payees that misuse funds when acting on behalf of a retiree who receives benefits under the Federal Employees’ Retirement System (FERS) or the Civil Service Retirement System (CSRS).

The law will provide it is “unlawful for a representative payee to embezzle or in any manner convert all or any part of the amounts received from payments received as a representative payee to a use other than for the use and benefit of the minor or individual on whose behalf such payments were received.”

This bill classifies misusing federal retirement funds as a felony with a sentence of up to five years in prison. It is intended to deter deceitful caretaker behavior and provide similar protections that Social Security and Veterans Affairs payees now receive.

Senator James Lankford (R-OK) wrote in a press release:

Misuse of federal retirement benefits is sadly constant. This bill will help prevent fraud and protect federal retirees by clarifying this type of fraud is a federal crime. I’m glad to see this necessary legislation make it to the finish line. I look forward to the President signing this bill into law on behalf of our retired federal employees.

Senator Gary Peters (D-MI) was another sponsor of this bi-partisan bill. Senator Peters commented : “Unfortunately, retirees across the country have been defrauded of their hard-earned benefits by dishonest caretakers taking advantage of loopholes in the law. I’m proud that our bipartisan bill to close those loopholes is headed to the president’s desk, and will continue working to crack down on fraud and safeguard the retirement funds of hardworking Americans.”

© 2020 Ralph R. Smith. All rights reserved. This article may not be reproduced without express written consent from Ralph R. Smith.

Tags:

About the Author

Ralph Smith has several decades of experience working with federal human resources issues. He has written extensively on a full range of human resources topics in books and newsletters and is a co-founder of two companies and several newsletters on federal human resources. Follow Ralph on Twitter: @RalphSmith47

Top