Tag Archives: Comptroller Thomas P. DiNapoli

Fighting Fraud and Protecting Pension Benefits

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Fighting Fraud and Protecting Pension Benefits

Since taking office, New York State Comptroller Thomas P. DiNapoli has fought the abuse of public funds. One of his top priorities is protecting NYSLRS and its retirees from pension fraud.

The Comptroller’s Division of Investigations regularly partners with federal, state and local law enforcement in New York and across the country to bring corrupt individuals to justice and recoup stolen NYSLRS money. Over the past several years, pension fraud investigations have led to 57 arrests and the recovery of over $5.8 million.

Here are some cases from earlier this year:

Joint Investigation Uncovers Caretaking Scheme

In May 2024, a joint investigation between the Comptroller’s office, the Rensselaer County District Attorney and the New York State Police led to the arrest of an Albany woman and man for allegedly stealing more than $200,000 in pension and Social Security payments from an 86-year-old retiree.

The defendants engaged in a caretaking scheme that left the elderly victim in deplorable living conditions and resulted in home foreclosure. They persuaded the victim to let them pay his bills, however, they did not pay the victim’s mortgage, property taxes or other bills for several years. This caused the foreclosure of the victim’s home, the repossession of his vehicle, and his electricity to be turned off.

As a result of the investigation, the victim was removed from the home and received necessary treatment.

In November 2024, one of the defendants pleaded guilty to grand larceny in the second degree and is awaiting sentencing. The second defendant was indicted by a Rensselaer County Grand Jury on charges of grand larceny in the second degree and the matter is currently pending in court.

Son Impersonates Father to Continue Receiving Pension

In 2017, a NYSLRS pensioner who had retired from the Nassau County Clerk’s Office in 1992, moved to Wyoming with his son. The retiree was never heard from again, and it is believed he died in Wyoming. His pension payments should have stopped when he died, but his son never reported his death.

In fact, the son went to great lengths to conceal his father’s death and continue receiving his pension and social security payments. He even whitened his hair and eyebrows to impersonate his deceased father.

But a call to the Comptroller’s Fraud Hotline prompted an investigation, which included the U.S. Attorney’s Office, the Social Security Administration, the U.S. Postal Inspection Service and the FBI.

The son was arrested on federal fraud charges in 2023. In February 2024, the son was sentenced to five years in prison and ordered to repay the $194,000 he stole in NYSLRS pension and Social Security benefits.

Man Steals Deceased Sister-in-Law’s Pension Payments

In October 1986, a stenographer from the Supreme Court, Appellate Division, retired with a disability retirement and the Single Life Allowance pension payment option. That means, when she died in January 2019, her monthly pension payments should have ended. Once NYSLRS discovered her death in July 2022, payments were stopped, and an investigation was launched.

A forensic analysis was completed on the bank account where the pension payments were being deposited, which was a joint account in the name of the retiree and her brother-in-law. The investigation found that the brother-in-law diverted over $50,000 in pension payments made after his sister-in-law’s death and used the money to pay credit card bills, travel and make online purchases.

The brother-in-law was arraigned on a charge of grand larceny in Albany County Court. The matter is pending in court.

You Can Help Fight Fraud

If you are aware of potential pension fraud, visit the Comptroller’s Fighting Public Corruption page to file a complaint online, or call the Fraud Hotline at 888-672-4555.

A Century of Security and Stability

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A century after its creation, the New York State and Local Retirement System (NYSLRS) is widely recognized as one of the best-managed and best-funded public pension systems in the nation. Comptroller DiNapoli recently announced that the New York State Common Retirement Fund (Fund), which holds and invests the assets of NYSLRS, had an estimated value of $268.3 billion as of June 30, 2021. The security and stability of NYSLRS and the Fund are due, in large part, to the stewardship of Comptroller DiNapoli, as well as a long line of State Comptrollers that came before him. The System has also been bolstered by some key events along the way.

NYSLRS History - key events contributing to the security and stability of the Retirement System and the Fund

In the Beginning

NYSLRS’ security and stability were built in at the start. In 1918, the State Legislature created the Commission on Pensions and charged it with recommending a pension system for State workers.

After surveying pension plans in New York and other states, the Pension Commission recognized the need to calculate the cost of the pension plan through actuarial calculations, which take into account such things as employees’ salaries and how long they are expected to be retired. They also saw the need to make provisions to cover those costs through contributions and other income. They recommended a plan supported by the contributions of employers (New York State and, eventually, local governments) and employees. The improved actuarial calculations the System uses today helps to ensure that member contributions and employer annual contributions are sufficient to keep the System adequately funded.

The Pension Commission also recommended a service retirement benefit be made available to workers who reached a certain age, based on average earnings and years of service. Though they didn’t use the term, their pension plan was very similar to the defined-benefit plan NYSLRS members have now.

Unlike the 401k-style defined-contribution plans common in the private sector today, a defined-benefit plan provides a guaranteed, lifetime benefit. With a defined-benefit plan, you don’t have to worry about your money running out during retirement, and your employer has an excellent tool for recruiting and retaining workers.

Constitutional Protection

In 1938, New York voters approved several amendments to the State Constitution, including Article 5, Section 7, which guarantees that a public pension benefit cannot be “diminished or impaired.” This constitutional language protects the interests of the Fund and its members and beneficiaries, ensuring that the money the Fund holds will be there to pay the pensions for all current and future retirees. The courts have upheld this constitutional provision to protect the Fund several times over the years.

For NYSLRS members and retirees, that means the retirement benefits you were promised when you started your public service career cannot be reduced or taken away.

Sound Investments

Sound investments are crucial to the health of the Fund, but in some cases changes in the law were needed to give Fund managers the flexibility to make the best investments. In 1961, the Fund was allowed to invest in the stock market, opening up the door for growth opportunities. Roughly half of the Fund’s assets are currently invested in stocks.

In 2005, the Legislature expanded the types of investments the Fund could make, allowing the Fund to increase investments in real estate, international stocks and other sectors that had been providing high returns.

Today, under Comptroller DiNapoli’s leadership, the Fund’s investment returns cover the majority of the cost of retirement benefits. After suffering a drop in value at the beginning of the COVID pandemic, the Fund had its best year in history, with estimated investment returns of 33.55 percent for fiscal year 2021.

NYSLRS is well-positioned to face the challenges of the future and provide retirement security for more than 1.1 million members, retirees and beneficiaries.