The Auditor-General's Department has detected RM4.66 million that were overpaid in pensions to civil servants or their eligible dependents between 2007 and 2010.

Of this amount, RM2.57 million were overpaid to the next-of-kin of 1,975 deceased civil servants. Of this amount, only RM850,000 have been recovered from 965 next-of-kin.

The balance of RM1.72 million, which should be claimed from the 1,010 others, have yet to be fully claimed, with only 206 individuals repaying RM390,000 through monthly instalments.

As for the rest, the RM1.33 million in overpaid pensions cannot be claimed because the next-of-kin cannot be traced, have died on or have chosen to ignore the notices sent to them.

Among others, the audit found that the overpaid pensions were the result of outdated death records.

Flaws in computerised system

This was despite there being a computerised system - Pensions Online Workflow Environment (Power) - in place at the Pensions Division of the Public Services Department (PSD) to update death records obtained from the National Registration Department (NRD).

"If the death records from the NRD do not match the information on Power, an ‘Unmatch Data' report is produced.

"For this report (which examines the record from) 2007 until September 2010, there were 2,262 retirees/pension recipients who died, but their status could not be updated," says the Auditor-General's Report 2010.

The information could not be updated because information such as names, identity card numbesr and dates of birth did not match those on Power.

"Based on information from the Pensions Division, the division now obtains death records from the NRD twice a month to update the Power system from April 2011 onwards," the report says.

Pensioners with multiple accounts

However, there are cases where the next-of-kin took a long time to seek the death certificate, such as four cases detected of delays from one to 62 months, resulting in RM16,065 in overpaid pensions.

Of the RM2.09 million in overpaid pensions, during the same period from 2007 until September 2010 to 339 pensioners, the cause was negligence.

"Based on feedback from the Pensions Division, the overpayments were due to lax internal controls on pension claims that exceeded the final salary drawn, no checks on pensioners with multiple accounts and cases where the maximum service period is not considered for pension calculations," read the report.

Among others, there were also cases of pensions paid to children above 21 years who are not pursuing higher education and pensions paid to widow/widowers that were not reduced to 70 percent after the retirement date for cases before Jan 1, 2009.

Earning more after death

There was also one case where one pensioner was grossly overpaid because of a decimal point error.

"Based on the (correct) calculations, the pensioner was supposed to receive RM214.33 a month, but instead received RM21,433 monthly for 16 months.

"However, the pensioner had already passed away in 2007," says the report.

Nevertheless, the audit notes that the collections unit of the Pensions Division has been attempting to recover the overpaid pension sums by sending notices to the pensioner's next-of-kin and working with banks to recover monies that are yet to be disbursed.

"In our opinion, the overpayment (of pension monies) should not happen because the administration of retirement benefits payments has been clearly spelled out and it is the responsibility for every officer to check, verify and approve information in the system," the report says.

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