Weinberg Bill To Crack Down On State Pension Fraud Receives Final Legislative Approval

Bill Would Make Sure Only Eligible Employees are Enrolled in Public Employee Retirement System

TRENTON – A bill sponsored by Senator Loretta Weinberg which would make various changes to New Jersey State pension certification in order to cut down on pension fraud and make sure that only people who are truly eligible may receive credit in the pension system was approved by the Senate today by a vote of 37-0, receiving final legislative approval.

“When a public employee serves honorably and devotes his or her entire life to public service, they deserve decent retirement benefits at the end of their career,” said Senator Weinberg, D-Bergen. “However, as we fight to make public employee pensions sustainable and affordable for taxpayers and enrollees alike, we need to be aware of the fraud and abuse of the pension system that drive up our costs. This bill would allow for greater policing of the State’s four public employee pension systems, and would ensure better outreach and education so employees know who is, and who is not, entitled to retirement benefits under the law.”

The bill, S-1392, would require public employers to certify the eligibility of their employees to be enrolled in the Public Employee Retirement System (PERS), the Teachers Pension and Annuity Fund (TPAF), the Police and Firemen’s Retirement Fund (PFRS), and the Judicial Retirement System. The certification process would occur at the time of enrollment as well as annually for each member of the four pension systems. The bill would require the Division of Pension and Benefits and the boards of trustees of each of the pension systems to establish a training program for certifying officers in order to educate them on the eligibility requirements for members of their pension system.

The bill would also clarify that it is a crime of the fourth degree – punishable by a fine of up to $10,000 and a term of imprisonment of up to 18 months – to knowingly and willfully make a false statement, or falsify or permit to be falsified any record, application, form or report to the retirement systems. The information regarding penalties for submitting false information to the retirement system would also be posted on certification forms to be filed each year for each member.

“Our public employee pension systems are awash in red ink, and years of abuse and misuse have helped push us to the brink of catastrophe,” said Senator Weinberg. “We need stronger safeguards in place and stricter employee eligibility reporting to pick off the low-hanging fruit and preserve pensions for those who deserve them based on years of public service. This bill alone won’t solve all of our pension woes, but it will ensure better compliance with our eligibility laws.”

The bill is based on recommendations made in the Inspector General’s December 2009 report, “Professional Services Provider Enrollment in PERS.” The report documented the case of an individual who was retained by multiple government entities to provide legal services, and was determined to be an employee eligible for pension credits, rather than an independent contractor, as he should have been classified under current law.

“There have been so many cases where people, knowingly or unknowingly, received pension credit to which they simply weren’t entitled,” said Senator Weinberg. “This bill would expand the education component of pension policing, so that everyone knows the eligibility criteria and the penalties associated with deceiving the public to qualify for a public pension or boost an individual’s pension. At the end of the day, this bill would go a long way to root our fraud and preserve decent retirement benefits for hard-working, honest public employees.”

The bill was unanimously by the Senate in August, and was amended and approved by the Assembly last week. It now heads to the Governor to be signed into law.

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