Sweeney Legislation To Save Taxpayer Dollars By Weeding Out Fraud Clears Committee

Would Revise Pension Disability Fund Requirements For Public Employees

TRENTON – Legislation sponsored by Senate President Steve Sweeney that would save taxpayer dollars by weeding out fraud in the pension disability fund system cleared the Senate Budget and Appropriations Committee today.

“Every cent of taxpayers’ money should be held accountable. That’s just common sense. And with hard working people in this state paying 20 percent more in property taxes in the last two years, they should not be forced to pay a nickel more because of any kind of government waste or fraud,” said Sweeney (D-Gloucester, Cumberland, Salem).

Media accounts last year highlighted an increase in the amount paid out through the pension disability system in the last few years, from $68 million in 2007, to $91.5 million in 2010. The increases came after a series of court decisions that expanded who might be eligible for pension disability. That, in turn, has created a greater opportunity for potential abuse of the system.

Under the bill, S1913, anyone applying for ordinary disability and accidental disability benefits must be certified as not only incapacitated for their former job, but also for another other available job that might be assigned for the same pay. In addition, in the Judicial Retirement System (JRS), the bill would establish an ordinary disability (needs 10 years of service to qualify) benefit at 1.5 percent of compensation multiplied by years of service with a minimum of 40 percent. Currently, JRS does not distinguish between ordinary or accident disability; it only has a disability retirement with a benefit of three-fourths of final salary.

For members of JRS, Police and Firemen’s Retirement System (PFRS) and State Police Retirement System (SPRS), an ordinary disability retirement would not be available until the member has attained 10 years of service instead of the current requirement of four years for PFRS and SPRS and nominal years for JRS. This is the current requirement for Public Employees Retirement System (PERS) and Teachers’ Pension and Annuity Fund (TPAF).

“There is no question that there are individuals who have suffered serious work related injuries and are entitled to disability payments. At the same time, there are those looking to game the system at the expense of the taxpayer. We cannot allow that to continue to happen. The measures outlined in this bill will go a long way towards eliminating fraud in the system,” said Sweeney.

The bill would also establish a fraud unit within the Office of the Attorney General, for the prevention and identification of fraudulent disability pension claims and payments. Other changes to the current structure include that an application for accidental disability must be filed within two years, instead of the current five years, of the original traumatic event: Also, a temporary joint labor and management Accidental Disability Pension Review Committee would be created. The committee would study the current requirement that a member of TPAF, JRS, PERS, PFRS and SPRS must be permanently and totally disabled as a direct result of a traumatic event in order to be deemed eligible for the receipt of an accidental disability benefit and develop a recommendation for specific criteria.

The bill now heads to the Senate floor.

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