A comptroller’s review found state pension officials and the pension board were not told of some members’ misconduct, leading to overpayments. (Photo by Dana DiFilippo/New Jersey Monitor)
Significant breakdowns in retirement procedures allowed police and fire officials to collect pension payouts despite records of misconduct that should have barred or reduced those awards, the state comptroller said in a report released Wednesday.
The report found 21 of the roughly 60 Police and Firemen’s Retirement System members with misconduct records examined in the report did not undergo the required honorable service reviews that weigh whether their benefits should be reduced.
“These 21 former officers are the ones we found. We don’t know how many are out there who committed misconduct and are getting full pensions simply because no one told the pension board what they did wrong,” said acting State Comptroller Kevin Walsh.
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The pension fund’s board has since conducted honorable service reviews for nearly all 21 of those officers, the report says. Four had their pensions partially reduced, though one reduction was later reversed, according to the report.
Under New Jersey law, public pensions are conditioned on honorable service, and the law permits pension boards to reduce or bar pension benefits for public workers who commit misconduct.
Certain offenses like official misconduct, sexual assault, and certain bribery charges, among numerous others, demand that pensions be automatically forfeited, and some of the officials who improperly received benefits faced serious allegations, including an officer charged and later convicted of possessing child pornography.
“These were not insignificant cases of misconduct,” the report says.
Walsh’s office contends that breakdowns occurred at multiple levels. Local employees tasked with sharing information about members’ misconduct with state officials frequently didn’t, the comptroller said, partly because they were often unaware of the breadth of their responsibility.
They wrongly believed information about criminal matters or civil service discipline would automatically flow to the state division that oversees pensions and benefits, or failed to report past discipline out of a belief that resolved matters should not affect a worker’s ability to retire, the report says.
The confidentiality of internal affairs files likewise contributed to the oversights, according to the comptroller. Though state pension officials can obtain those documents, employers have no affirmative duty to provide them absent a request in most circumstances, and local employees responsible for sharing information about misconduct may lack access to them entirely, the report says.
“If the pension board is not affirmatively provided with the information, it will not know to request it in order to evaluate honorable service prior to awarding a pension to a retiring member. In turn, in many instances, the pension board will unknowingly fail to fulfill its statutory and fiduciary duties,” the report says.
In other cases, settlement agreements between officers and their employers improperly shielded misconduct records in violation of state law that requires employers to share agreements that stem from misconduct claims with pension officials.
Some agreements reviewed by the comptroller mischaracterized time officers spent suspended for misconduct as service time that contributed to the size of their pension, according to the report. Others improperly allowed members who were not permitted to work due to misconduct to use vacation or sick time to boost their length of service and secure more lucrative pensions, the report says.
These missteps came with costs, according to the comptroller. Improper pension payments to even a single member can total hundreds of thousands of dollars, weakening the overall health of pension funds.
Though the local part of the Police and Firemen’s Retirement System of New Jersey is better funded than other New Jersey public pensions, the fund is not expected to reach full funding in the next quarter-century, according to state pension documents.
The state’s pension and benefits division and the pension fund should amend regulations to require that employers share misconduct-related documents like plea agreements, investigative reports, and toxicology reports, among dozens of others, the report recommends.
They should require members to self-report any disciplinary matters they faced throughout the length of their enrollment in the pension system and conduct internal audits to identify those who did not undergo an honorable service review, the report says.
The Legislature should consider making those requirements law and allow the attorney general to periodically audit settlement agreements between retired police officers and firefighters and their employers, the comptroller’s report says.
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