A bipartisan Senate bill aims to better protect federal retirees from nefarious financial representatives seeking to steal their benefits.
The 2015 Representative Payee Fraud Prevention Act, which Sens. James Lankford, R-Okla., and Heidi Heitkamp, D-N.D., to introduced Monday afternoon, would give U.S. attorneys the statutory authority to prosecute retiree representatives who misuse funds from the Federal Employees Retirement System and the Civil Service Retirement System. The bill classifies misuse of such benefits as a felony, and provides the same protections that veterans and Social Security recipients receive. Under the representative payee program, a person or an organization manages benefits for recipients who are unable to do so for themselves.
“It’s important that the Federal Employees Retirement System and Civil Service Retirement System work as intended for federal employees and are protected from fraud,” said Lankford in a statement. “Sadly, caretaker misuse of these benefit payments is becoming more prevalent.”
Lankford and Heitkamp are respectively, chairman and ranking member of the Homeland Security and Governmental Affairs Subcommittee on Regulatory Affairs and Federal Management.
“Most financial caregivers are loved ones who selflessly step in to manage the finances for retirees who are unable to do so, but we have heard about a few bad actors who are stealing that money from retirees,” said Heitkamp in a statement. “Such harsh actions deserve harsh punishments.”
In a 2013 Retirement Planning column in Government Executive, Tammy Flanagan pointed out that agencies are supposed to assist employees with retirement information to avoid scams:
“Agencies are responsible for providing retirement counseling for federal employees, including assistance with deposits, redeposits and creditable service information; retirement estimates for specific retirement dates; specific retirement date selection support; help with completing the retirement application; and information to assist employees who are seeking sound financial planning information to help them avoid scams and fraud. (See Chapter 40, Planning and Applying for Retirement, CSRS and FERS Handbook, and Fact Sheets on Retirement Scams, Benefits Administration Letter, Aug. 16, 2011).”