A4641

An Act concerning the garnishment and forfeiture of public pensions for conviction of certain crimes involving or touching public office or employment and amending various parts of the statutory law.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. Section 1 of P.L.1995, c.408 (C.43:1-3) is amended to read as follows:

1. a. The receipt of a public pension or retirement benefit is hereby expressly conditioned upon the rendering of honorable service by a public officer or employee.

b. The board of trustees of any State or locally-administered pension fund or retirement system created under the laws of this State is authorized to order the forfeiture of all or part of the earned service credit or pension or retirement benefit of any member of the fund or system for misconduct occurring during the member's public service which renders the member's service [or part thereof] dishonorable and to implement any pension forfeiture ordered by a court pursuant to section 2 of P.L.2007, c.49 (C.43:1-3.1).

c. In evaluating a member's misconduct to determine whether it constitutes a breach of the condition that public service be honorable and whether forfeiture [or partial forfeiture] of earned service credit or earned pension or retirement benefits is appropriate, the board of trustees shall consider [and balance] only 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)] (1) 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 isolated;

[(8)] (2) the relationship between the misconduct and the member's public duties; and

[(9)] (3) 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].

The board of trustees additionally may consider, but shall not be required to, the following mitigating factors in determining whether the member should nonetheless receive a portion of their earned service credit or pension or retirement benefit:

(1) the member’s length of service;

(2) the member's public employment history and record covered under the retirement system;

(3) any other public employment or service; or

(4) other personal circumstances relating to the member which bear upon the justness of forfeiture.

d. Whenever a board of trustees determines, pursuant to this section, that a partial forfeiture of earned service credit or 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 first occurred or, if termination as of that date would in light of the nature and extent of the misconduct result in an excessive pension or retirement benefit or in an excessive forfeiture, a date reasonably calculated to impose a forfeiture that reflects the nature and extent of the misconduct and the years of honorable service.

e. Notwithstanding any other law to the contrary, a member who has been found to have served dishonorably, and therefore forfeits their earned service credit or pension or retirement benefit, shall receive a refund of their contributions which, at the discretion of the board of trustees of the pension fund or retirement system, may be with or without any accrued interest.

(cf: P.L.2007, c.49, s.1)

2. Section 2 of P.L.2007, c.49 (C.43:1-3.1) is amended to read as follows:

2. a. A person who holds or has held any public office, position, or employment, elective or appointive, under the government of this State or any agency or political subdivision thereof, who is convicted of, or pleads guilty or nolo contendere to, any crime set forth in subsection b. of this section, or of a substantially similar offense under the laws of another state or the United States which would have been such a crime under the laws of this State, which crime or offense involves or touches such office, position or employment, shall forfeit all of the pension or retirement benefit earned as a member of any State or locally-administered pension fund or retirement system in which he participated at the time of the commission of the offense and which covered the office, position or employment involved in the offense. As used in this section, a crime or offense that "involves or touches such office, position or employment" means that the crime or offense was related directly to the person's performance in, or circumstances flowing from, the specific public office or employment held by the person.

b. Subsection a. of this section applies to [a conviction of any of] the following crimes:

(1) Paragraph (4) of subsection a. of N.J.S.2C:13-5, criminal coercion;

(2) N.J.S.2C:20-4, theft by deception, if the amount involved exceeds $10,000;

(3) Subsection d. of N.J.S.2C:20-5, theft by extortion;

(4) N.J.S.2C:20-9, theft by failure to make required disposition of property received, if the amount involved exceeds $10,000;

(5) N.J.S.2C:21-10, commercial bribery;

(6) Section 3 of P.L.1994, c.121 (C.2C:21-25), money laundering;

(7) Section 97 of P.L.1999, c.440 (C.2C:21-34), false contract payment claims;

(8) N.J.S.2C:27-2, bribery in official matters;

(9) N.J.S.2C:27-3, threats and other improper influence in official and political matters;

(10) Section 100 of P.L.1999, c.440 (C.2C:27-9), unlawful official business transaction where interest is involved;

(11) Section 5 of P.L.2003, c.255 (C.2C:27-10), acceptance or receipt of unlawful benefit by public servant for official behavior;

(12) Section 6 of P.L.2003, c.255 (C.2C:27-11), offer of unlawful benefit to public servant for official behavior;

(13) N.J.S.2C:28-1, perjury;

(14) N.J.S.2C:28-5, tampering with witnesses;

(15) N.J.S.2C:28-7, tampering with public records or information;

(16) N.J.S.2C:29-4, compounding;

(17) N.J.S.2C:30-2, official misconduct;

(18) N.J.S.2C:30-3, speculating or wagering on official action or information;

(19) Section 3 of P.L.2003, c.31 (C.2C:30-7), pattern of official misconduct;

(20) Paragraph (1) of subsection a. of section 1 of P.L.2007, c.158 (C.2C:27-12), corruption of public resources, if the amount or value of the public resource is $500,000 or more;

(21) N.J.S.2C:14-2, sexual assault;

(22) N.J.S.2C:14-3, sexual contact; [or]

(23) N.J.S.2C:14-4, lewdness; or

(24) Any other crime of the first or second degree, or an offense substantially similar under the laws of another state or the United States.

c. A court of this State shall enter an order of pension forfeiture pursuant to this section:

(1) Immediately upon a finding of guilt by the trier of fact or a plea of guilty or nolo contendere entered in any court of this State unless the court, for good cause shown, orders a stay of the pension forfeiture pending a hearing on the merits at the time of sentencing; or

(2) Upon application of the county prosecutor or the Attorney General, when the pension forfeiture is based upon a conviction of, or plea of guilty or nolo contendere to, an offense under the laws of another state or of the United States. An order of pension forfeiture pursuant to this paragraph shall be deemed to have taken effect on the date the person was found guilty by the trier of fact or pled guilty or nolo contendere to the offense.

d. No court shall grant a stay of an order of pension forfeiture pending appeal of a conviction or pension forfeiture order unless the court is clearly convinced that there is a substantial likelihood of success on the merits. If the conviction be reversed or the order of pension forfeiture be overturned, his pension rights and benefits shall be restored from the date of pension forfeiture.

e. Nothing in this section shall be deemed to preclude the authority of the board of trustees of any State or locally-administered pension fund or retirement system created under the laws of this State from ordering the forfeiture of [all or part of] the earned service credit or pension or retirement benefit of any member of the fund or system for misconduct occurring during the member's public service pursuant to the provisions of P.L.1995, c.408 (C.43:1-3 et seq.), including in a case where the court does not enter an order of forfeiture pursuant to this section.

f. Notwithstanding any other law to the contrary, a member against whom an order of pension forfeiture has been entered under this section shall receive a refund of their contributions which, at the discretion of the board of trustees of the pension fund or retirement system, may be with or without any accrued interest.

(cf. P.L.2019, c.190, s.1)

3. N.J.S.18A:66-51 is amended to read as follows:

18A:66-51. The right of a person to a pension, an annuity, or a retirement allowance, to the return of contributions, any benefit or right accrued or accruing to a person under the provisions of this article, and the moneys in the various funds created under this article[,]:

a. shall be exempt from any State or municipal tax and from levy and sale, garnishment, attachment or any other process arising out of any State of Federal court, except that the State or other public employer shall be entitled to the enforcement of an order of garnishment against the withdrawal of any contributions by, or the payment of a retirement allowance to, a member or beneficiary in the amount of a money judgment obtained by the State or other public employer and rendered against that member if that member is convicted of, or pleads guilty or nolo contendere to, an offense under the provisions of chapter 27 of Title 2C of the New Jersey Statutes, or any other offense involving a theft or misuse of public funds, or any attempt or conspiracy to commit any such offense. Such judgment may include the cost of prosecution as well as the amount of restitution ordered; and[,]

b. except as hereafter in this section and as in this article otherwise provided, shall be unassignable.

Nothing in this section shall prohibit any person insured under a group insurance policy, pursuant to an arrangement among the insured, the group policyholder and the insurer, from making to any person other than his employer, a gift assignment of the rights and benefits conferred on him by any provision of such policy or by law including specifically but not by way of limitation the right to exercise the conversion privilege and the right to name a beneficiary. Any such assignment, whether made before or after the effective date of this act, shall entitle the insurer to deal with the assignee as the owner of all rights and benefits conferred on the insured under the policy in accordance with the terms of the assignment.

(cf: P.L.1969, c.98, s.1)

4. Section 41 of P.L.1973, c.140 (C.43:6A-41) is amended to read as follows:

41. The right of a person to a pension, retirement allowance or any benefit or right accrued or accruing to a person under the provisions of this act and the moneys in the various funds created under this act[,]:

a. shall be exempt from any State or municipal tax and from levy and sale, garnishment, attachment or any other process arising out of any State or federal court, except that the State or other public employer shall be entitled to the enforcement of an order of garnishment against the withdrawal of any contributions by, or the payment of a retirement allowance to, a member or beneficiary in the amount of a money judgment obtained by the State or other public employer and rendered against that member if that member is convicted of, or pleads guilty or nolo contendere to, an offense under the provisions of chapter 27 of Title 2C of the New Jersey Statutes, or any other offense involving a theft or misuse of public funds, or any attempt or conspiracy to commit any such offense. Such judgment may include the cost of prosecution as well as the amount of restitution ordered; and[,]

b. except as hereinafter in this section and as in this act otherwise provided, shall be unassignable.

(cf: P.L.1981, c.470, s.21)

5. Section 53 of P.L.1954, c.84 (C.43:15A-53) is amended to read as follows:

53. The right of a person to a pension, an annuity, or a retirement allowance, to the return of contributions, any benefit or right accrued or accruing to a person under the provisions of this act and the moneys in the various funds created under this act[,]:

a. shall be exempt from any State or municipal tax and from levy and sale, garnishment, attachment or any other process arising out of any State or Federal court, except that the State or other public employer shall be entitled to the enforcement of an order of garnishment against the withdrawal of any contributions by, or the payment of a retirement allowance to, a member or beneficiary in the amount of a money judgment obtained by the State or other public employer and rendered against that member if that member is convicted of, or pleads guilty or nolo contendere to, an offense under the provisions of chapter 27 of Title 2C of the New Jersey Statutes, or any other offense involving a theft or misuse of public funds, or any attempt or conspiracy to commit any such offense. Such judgment may include the cost of prosecution as well as the amount of restitution ordered; and[,]

b. except as in this section and in this act otherwise provided, shall be unassignable.

(cf: P.L.1969, c.98, s.2)

6. Section 17 of P.L.1944, c.255 (C.43:16A-17) is amended to read as follows:

17. The right of a person to a pension, an annuity, or a retirement allowance, to the return of contributions, any benefit or right accrued or accruing to a person under the provisions of this act and the moneys in the various funds created under this act[,]:

a. shall be exempt from any State or municipal tax and from levy and sale, garnishment, attachment or any other process, except that the State or other public employer shall be entitled to the enforcement of an order of garnishment against the withdrawal of any contributions by, or the payment of a retirement allowance to, a member or beneficiary in the amount of a money judgment obtained by the State or other public employer and rendered against that member if that member is convicted of, or pleads guilty or nolo contendere to, an offense under the provisions of chapter 27 of Title 2C of the New Jersey Statutes, or any other offense involving a theft or misuse of public funds, or any attempt or conspiracy to commit any such offense. Such judgment may include the cost of prosecution as well as the amount of restitution ordered; and

b. except as hereinafter in this section and as in this act otherwise provided, shall be unassignable.

(cf: P.L.1969, c.98, s.3)

7. Section 45 of P.L.1965, c.89 (C.53:5A-45) is amended to read as follows:

45. The right of a person to a pension, an annuity, or a retirement allowance, to the return of contributions, any benefit or right accrued or accruing to a person under the provisions of this act and the moneys in the various funds created under this act[,]:

b. except as hereinafter in this section and as in this act otherwise provided, shall be unassignable.

(cf: P.L.1969, c.98, s.4)

8. This act shall take effect immediately.

STATEMENT

This bill would change the factors to be considered by the boards of State or locally administered retirement systems hearing pension forfeiture cases concerning public employees. It would emphasize the nature of the misconduct, the relationship between the misconduct and the person’s public duties, and the person’s moral turpitude, and require the board to direct the person’s entire pension be forfeited based on these factors. Additional factors may only be used subsequently to mitigate this full forfeiture to a partial forfeiture. Where a forfeiture is warranted, this bill requires that the person receive a refund of their contributions, but allows for the board to determine whether that refund is with or without any accrued interest.

This bill would require the forfeiture of the pension or retirement benefit of a person if the person is convicted of any crime of the first or second degree, or the equivalent under the laws of another state or of the United States, when the offense is related to the person’s performance in or circumstances flowing from the public office or employment held by the person. This bill also specifies that pension forfeiture applies in cases that result in qualifying guilty or nolo contendere pleas, in addition to convictions.

This bill would also open a person’s public pension to garnishment in order to fulfill court ordered restitution of public funds when a person has been convicted of, or plead guilty or nolo contendere to, certain offenses.