Editorial: Amnesty for Pension Scammers

Dozens of retired city cops, firefighters and prison guards were arrested several days ago on charges that they faked mental health issues in order to receive disability payments from Social Security. Four accused ringleaders coached the workers so they could feign symptoms of depression and other mental illnesses. Some sought to exploit 9/11 in making their claims.

Federal officials described the plot as the most extensive attempt to defraud Social Security. Some of the schemes go back 20 years, and there are indications that the scheme involved many more than the 104 who were busted on Jan. 7.

News of the Social Security fraud comes after revelations of a similar scheme at the Long Island Railroad. Thirty-two people have been arrested on charges that they falsely claimed to be disabled because of on-the-job injuries.

The latest fraud case may have cost taxpayers as much as $400 million. Uniformed workers who qualify for disability because of on-the-job injuries received pensions of 75 percent of their annual salary, tax-free.

Perhaps it is time to offer amnesty to public employees who knowingly obtained undeserved disability pensions, often with the connivance of medical office personnel. 

Those who come forward and submit to a “reassessment” of their pensions could be allowed to have their pension payments recalculated and receive their rightful pension, minus a 25 percent penalty for the “error.” Perhaps the attorney general or comptroller could appoint a special investigative bureau to review all cases and try and prosecute those who have taken advantage of the system. Ideally, this would occur in conjunction with badly needed pension reform.

Most of the recipients are honorable people. But as recent events have shown, not all disability pensions are legitimately earned. Hundreds of millions in taxpayer dollars could be saved if the city or state offered an amnesty for those who know that their pensions and benefits are fraudulent.

The accounting and paperwork might be tricky, but it should be possible to adjust the pensions of those who come forward. It’s certainly better than endless (and expensive) investigations and trials.