ASSEMBLY STATE GOVERNMENT COMMITTEE

STATEMENT TO

ASSEMBLY, No. 1012

STATE OF NEW JERSEY

DATED: JUNE 10, 1996

      The Assembly State Government Committee reports favorably Assembly, No. 1012.

      This bill allows a public employer to levy a judgment for restitution of illegally obtained funds against a convicted public employee's pension contributions to any of the principal State-administered retirement systems.

      Under current law, the right of a public employee to a pension, an annuity, or a retirement allowance or to the return of contributions from the Teachers' Pension and Annuity Fund, the Judicial Retirement System, the Public Employees' Retirement System, the Police and Firemen's Retirement System or the State Police Retirement System is exempt from levy and sale, garnishment, attachment or any other process arising out of any State or Federal court.

      Under the bill, the State or other public employer may request a transfer from the accumulated deductions credited to a retirement system member in the amount of a money judgment obtained by the employer and rendered against that member if convicted of an offense under the provisions of chapter 27 of Title 2C of the New Jersey Statutes (concerning bribery and corrupt influence), or any other offense involving a theft or misuse of public funds, or any attempt or conspiracy to commit any such offense. The judgment may include the cost of prosecution as well as the amount of restitution ordered.

      The bill also provides that if the amount of the accumulated deductions in an annuity account standing to the credit of a convicted employee has been reduced by a judgment for restitution, the annuity portion of the employee's retirement allowance shall be based on the amount of accumulated deductions remaining and the pension amount of the employee's retirement allowance shall be calculated on the basis of all deductions ever credited and shall not exceed the pension amount to which the employee would have been entitled had the employee's accumulated deductions not been reduced.

      This bill was prefiled for introduction in the 1996 session pending technical review. As reported, the bill includes the changes required by technical review, which has been performed.