Verification that retirees are still living

[ScottR]

What techniques are used by large plans and/or annuity companies to verify that retirees in pay status are still living? i.e. what's to prevent relatives or the estate from continuing to cash retirement checks after the participant dies. Is there anything that can be printed on the check to prevent someone other than the payee from cashing it? Are any investigative services available?

TIA.

... Scott

[Guest Stuartt]

One method is to use the Social Security Death Index (SSDI)

http://ssdi.rootsweb.ancestry.com/

[david rigby]

Will direct deposit help?

i.e., if the bank knows of the death, will this increase the likelihood of feedback from the bank?

[SoCalActuary]

One method is to use the Social Security Death Index (SSDI)

http://ssdi.rootsweb.ancestry.com/

This technique is helpful if you reflect the lag in reporting. But we see plans paying annuities where teh SSDI still does not report a death that occurred last October, a 9 month lag.

Better is to design the plan for a post-retirement death reporting incentive, such as a lump sum funeral benefit of a few thousand dollars, or 3 months payments if less. Then the beneficiaries have an incentive to report the event, and if they don't, you can offset the overpayments made against the death benefit.

Another technique is to have some regular communications with the retirees, such as a birthday gift card, newsletter, etc. This keeps the retiree in touch with the company and reduces the negative emotional temptation to cheat on the former employer.

[AndyH]

Will direct deposit help?

i.e., if the bank knows of the death, will this increase the likelihood of feedback from the bank?

Direct deposit is worse because there is no affirmative action needed for fraud in the case of a joint account, like there would be in signing a check made out to someone else. These can go undetected for years and the recipient can just play dumb.

Some banks have verification services, the details of which I don't know. But for random inquiries I use SoCal's link all the time. I haven't noticed a problem with lag time.

[Andy the Actuary]

There are services that process bulk files of Social Security Numbers against SS and State records. I thought I saw some advertise some time ago on benefitslink.