Looking at Fiduciary Responsibilities- Death Audits on the Day of the Dead

Día de los Muertos, or Day of the Dead, is a holiday celebrated throughout Latin American to remember and honor loved ones who have passed on to the other side. On this Day of the Dead, we can’t help but wonder how plan administrators are celebrating….is the so-called “Death Audit” for your plan in order?

Tracking retirees and beneficiaries to ensure benefit payments are going to the rightful pension recipient is among plan management’s fiduciary duties. This involves keeping records up to date with respect to addresses and physical existence of the recipients. Instances abound where the retirees have passed on (died) yet their pension checks are unlawfully cashed for extended periods of time causing significant loss of plan assets. Almost all pension plans offer a variety of payment options, which typically end at the time the annuitant dies. If a payment continues after the required end date without knowledge of the plan sponsor, funds are being improperly disbursed. The longer the death goes unreported or undiscovered, the greater the over-payment and the more difficult it is to recover plan assets.

Plan management often faces challenges in performing periodic or regular ‘death audits’ due to limited internal resources and high cost. Until recently, the Social Security Administration allowed access to the Death Master File (DMF)  where deceased pensioners and beneficiaries could be tracked. However, the DMF has now limited access to the repository and many feel that the database is missing information.  Tracking the existence and demographic information of individuals has proven to be a cost-effective third-party solution that plan sponsors have engaged to demonstrate effective due diligence in performing their fiduciary responsibilities.

As a fiduciary it is important to ensure that pension benefits are only sent to those entitled. A death audit can also lower Pension Benefit Guaranty Corporation premiums, reduce funding liabilities, and is a prudent use of plan assets.

Helping you succeed as a plan fiduciary is our priority.  Other recent articles from our benefit plan team include:


Want to Know More About Dia de Los Muertos? 

Day of the Dead originated several thousand years ago with the Aztec, Toltec, and other Nahua people, who considered mourning the dead disrespectful. The dead were still members of the community, kept alive in memory and spirit—and during Día de los Muertos, they temporarily returned to Earth. Today’s Día de los Muertos celebration is a mash-up of pre-Hispanic religious rites and Christian feasts. It takes place on November 1 and 2—All Saints’ Day and All Souls’ Day on the Catholic calendar—around the time of the fall maize harvest.

Read More on National Geographic.



Arshad Haque
Audit Senior, Employee Benefit Assurance Services

Mr. Haque is responsible for supervising numerous financial statement and compliance audits of employee benefit plans. He has extensive knowledge of accounting and technical reporting standards and has assisted clients with their annual audit and reporting requirements for various employee benefit plan audits. Connect with Arshad via email.