Audit Report on the New York City Teachers’ Retirement System’s Controls over the Identification of Deceased Individuals Collecting Pension Payments

To identify deceased individuals collecting pensions, the New York City Teachers’ Retirement System (TRS) utilizes a monthly death match report comparing Federal Social Security Administration (SSA) and TRS records. The report would identify an individual who is actively receiving a pension payment but is reported deceased on the SSA death report. TRS itself does not produce any death match reports; it uses a death match report generated by a third party vendor. The third party creates death match reports by comparing the SSA death records against an individual’s date of death as recorded in the Unified Pension System (UPS). The report lists individuals who have been reported as deceased during that month and are also receiving pension payments. These reports are created once a month. They also identify an individual who is actively receiving a pension payment but is reported dead on the SSA death report.

As of November 2010, TRS uses the third party report in conjunction with the City Human Resources and Management System (CHRMS) HR-11 death match report. The HR-11 report, preprogrammed by the New York City Office of Payroll Administration (OPA), utilizes a cumulative database to identify and reduce instances of payments to deceased recipients and to compare dates of death recorded within the New York City Pension Payroll Management System (PPMS) to a database of deceased individuals. A match is generated when a pensioner or beneficiary listed as active (not deceased) in PPMS is reported as deceased in the database. The database of deceased individuals is updated on a monthly basis with a file provided by SSA.

Audit Findings and Conclusions

The audit determined that TRS maintains adequate controls over the identification of deceased individuals collecting pension payments. TRS took timely and appropriate action on the individuals who were identified as deceased. However, the HR-11 reports lack evidence of supervisory approval and identification of the staff responsible for the initial examination. Moreover, the PPMS CHRMS system only produces reports on a real-time basis and cannot be recreated or generated to obtain past information. Consequently, TRS needs to create an archive of previous reports for future investigations.

Finally, TRS outsources the production of certain death match reports, which is no longer necessary due to the HR-11 report. Outsourcing the death match reports is an unnecessary risk because it requires the dissemination of personally identifiable information to a third party. Although there is no indication that these records were misused, TRS cannot be assured that the controls over this information are adequate.

Audit Recommendations

TRS should:

• Ensure that work performed by staff is documented and supervisory reviews are evidenced by sign-off—attesting to compliance with policies and procedures.
• Coordinate with FISA to determine the feasibility of developing a back-up plan to store the HR-11 reports.
• Consider using the HR-11 and Death Match Discrepancy Report in place of obtaining the third party vendor reports.

Auditee Response

TRS officials generally agreed with the audit’s findings and recommendations.