ASSEMBLY, No. 123
STATE OF NEW JERSEY
Introduced Pending Technical Review by Legislative Counsel
PRE-FILED FOR INTRODUCTION IN THE 1996 SESSION
By Assemblyman JONES
An Act concerning the forfeiture of retirement benefits by public officers and employees, supplementing Title 43 of the Revised Statutes and amending P.L.1938, c.221.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. (New section) The receipt of a public pension or retirement benefit is expressly conditioned upon the rendering of honorable service by a public officer or employee during the entire period of time that the officer or employee is enrolled as an active member of a State- or locally-administered pension fund or retirement system.
2. (New section) a. The board of trustees of any State- or locally-administered pension fund or retirement system created under the laws of this State shall order the forfeiture of the entire pension or retirement benefit of any person otherwise entitled to receive a benefit who, while an active member of the pension fund or retirement system, breaches the condition of rendering honorable service by committing an act which results in the person's conviction:
(1) under the laws of this State of an offense involving dishonesty, other than a disorderly person's offense or a petty disorderly person's offense, or of a crime of the third degree or above;
(2) under the laws of another State or of the United States of an offense or crime which, if committed in this State, would be an offense or crime included in paragraph (1) of this subsection; or
(3) of an offense involving or touching upon the person's public office, position or employment.
b. A board of trustees may order the forfeiture of all or part of the pension or retirement benefit of any person entitled to receive a benefit who, while an active member of the pension fund or retirement system, engages in misconduct which breaches the condition of rendering honorable service, other than misconduct which is the basis of a conviction mandating total forfeiture pursuant to subsection a. of this section. In evaluating such an act of misconduct to determine whether it constitutes a breach of the condition that public service be honorable and whether forfeiture or partial forfeiture of earned pension or retirement benefits is appropriate, the board of trustees shall consider and balance the following factors in view of the goals to be achieved under the pension laws:
(1) the member's length of service;
(2) the basis for retirement;
(3) the extent to which the member's pension has vested;
(4) the duties of the particular member;
(5) the member's public employment history and record covered under the retirement system;
(6) any other public employment or service;
(7) the nature of the misconduct or crime, including the gravity or substantiality of the offense, whether it was a single or multiple offense and whether it was continuing or isolate;
(8) the relationship between the misconduct and the member's public duties;
(9) the quality of moral turpitude or the degree of guilt or culpability, including the member's motives and reasons, personal gain and similar considerations;
(10) the availability and adequacy of other penal sanctions; and
(11) other personal circumstances relating to the member which bear upon the justness of forfeiture.
c. Whenever a board of trustees determines, pursuant to subsection b. of this section, that a partial forfeiture of earned pension or retirement benefits is warranted, it shall order that benefits be calculated as if the accrual of pension rights terminated as of the date the misconduct began.
d. A survivor of any person who forfeits all or part of a pension or retirement benefit pursuant to this section shall similarly forfeit the right to all or part of the benefit.
e. A person who forfeits all or part of a pension or retirement benefit shall be repaid all of the person's contributions to the fund or system in the case of complete forfeiture and contributions from the date on which the misconduct began in the case of a partial forfeiture, without interest.
3. (New section) A county or municipal prosecutor shall inform the Director of the Division of Criminal Justice in the Department of Law and Public Safety in writing whenever a prosecution is commenced, or a conviction entered, against any person who the prosecutor knows, or has reason to believe, is a member of a State- or locally-administered pension fund or retirement system of any crime or offense. The director shall compile this information and similar information from the records of the division and transmit it to the Director of the Division of Pensions and Benefits. The Director of the Division of Pensions and Benefits shall determine whether a particular officer or employee is a member of a State- or locally-administered pension fund or retirement system and, if so, shall forward the information to the board of trustees of that fund or system for the board's consideration pursuant to the provisions of section 1 of this act.
4. (New section) Whenever any State or local public employer takes formal disciplinary action against an officer or employee who is a member of any State or locally-administered pension fund or retirement system, it shall inform the board of trustees of the fund or system of its action in writing so that the board may consider the member's conduct pursuant to the provisions of section 2 of this act.
5. Section 1 of P.L.1938, c.221 (C.43:1-2) is amended to read as follows:
1. No pension or subsidy shall be paid by this State or by any municipality or school district of this State to any person for the period during which he is confined in a penal institution as a result of conviction of a crime involving moral turpitude which did not result in a complete for feiture of benefits pursuant to section 2 of P.L. , c. (C. ) (now pending before the Legislature as this bill), and such person shall lose all right to so much pension or subsidy as he would receive or be entitled to receive had he not been so confined; provided, that nothing herein contained shall prevent the payment of the pension for the sole benefit of the mother, father, wife or minor children of the person so confined in a penal institution if the board or commission administering the pension fund shall determine that such pension is necessary for their maintenance and, thereupon, the board or commission shall provide for the payment to the aforesaid person or persons so determined to be entitled to the benefit of the pension.
(cf: P.L.1938, c.221, s.1)
6. This act shall take effect immediately.
STATEMENT
This bill establishes criteria for the complete or partial forfeiture of pension benefits by a State or local government officer or employee because of misconduct while an active member of a State- or locally-administered pension fund or retirement system. The bill provides that the receipt of a public pension or retirement benefit is expressly conditioned upon the rendering of honorable service by a public officer or employee. It provides for mandatory forfeiture of all benefits for conviction of an offense involving dishonesty, a crime of the third degree or above or an offense touching upon the person's public office, position or employment. It also provides that the board of trustees of a public pension fund or retirement system may order a complete or partial forfeiture for other offenses or misconduct based upon an assessment of 11 factors which the board is required to consider and balance in view of the goals of the pension statutes. The 11 criteria were established by the New Jersey Supreme Court in Uricoli v. Police and Firemen's Retirement System, 91 N.J. 62 (1982) and are currently the basis for determining when complete or partial forfeiture is appropriate. The bill also provides that when a board of trustees determines that partial forfeiture is appropriate, it shall order that benefits be calculated as if the accrual of pension rights terminated as of the date the misconduct began.
The bill also establishes a procedure whereby the Director of the Division of Criminal Justice would collect and transmit, through the Division of Pensions and Benefits, to the appropriate board of trustees information concerning the prosecution or conviction of a State or local government employee who is a member of a public pension fund or retirement system. In addition, the bill would require State and local public employers to inform the board of trustees of a public pension fund or retirement system whenever formal disciplinary proceedings are brought against an employee who is member of the fund or system. The information received would be reviewed by the board of trustees to determine whether a forfeiture is triggered.
Concerns forfeiture of retirement benefits by certain members of public retirement systems; establishes system for reporting criminal charges and disciplinary actions against members to retirement systems.