Provides that a member shall forfeit his or her retirement rights and benefits if he or she is convicted of or pleads to certain crimes related to public employment

Summary of provisions

This bill would amend the Retirement and Social Security Law to establish procedures to be followed in order for a public employee convicted of misconduct to forfeit their pension.

Justification

New York State presently has no policy mandating the forfeiture of pension benefits by a public official who has been convicted of a crime. No matter how serious the offense or how grossly an official has abused his or her public office, the current laws which govern pension plans for state employees, as well as municipal employees outside New York City, make no provision for forfeiture.

A state or local government employee who otherwise meets the age and length of service requirements for a pension contained in New York's Retirement and Social Security Law is entitled to collect pension benefits, at public expense, even if he or she has betrayed the public trust and been convicted of a crime related to the betrayal of that trust.

Here are just a few examples of corrupt public officials who are receiving or continue to be eligible for their taxpayer funded pensions.

* A former mayor of a large upstate city who pleaded guilty to federal racketeering charges and extorting at least $1.2 million from contractors doing business with the city during his 16 years in office.

* At least two supreme court justices convicted of taking bribes for fixing cases and one former administrative judge for one of the largest counties in the state convicted of perjury after an investigation into extortion involving cable television franchises.

* A former superintendent of a major metropolitan area's Sanitation Department's Bureau of Waste Management who pleaded guilty to three counts of federal racketeering for accepting over $660,000 in bribes and payoffs. In addition, he allowed millions of gallons of hazardous and chemical waste to be dumped in municipal solid waste landfills.

* A former deputy director of the a major metropolitan area's Department of General Services who pleaded guilty to federal racketeering charges of extorting over a million dollars from building owners seeking to lease space to the city and was sentenced to 12 years in prison.

* A former Housing Authority supervisor convicted in a federal bribery and extortion probe and sentenced to 5 years in prison and a fine of $55,000, together with the conviction of 23 Housing Authority employees for job-related crimes.

* A former fiscal administrator for a major metropolitan area's Department of Health's Maternal, Infant and Reproductive Health program who embezzled nearly $200,000 from taxpayers through fraudulent payments to a bogus catering company he created and for taking kickbacks from contractors.

* Former state legislators convicted under federal law for using their state office for private gain.

New York's retirement systems at all levels of government should be explicitly based on the principle that the faithful and honest performance of a public employee's official duties is as much a precondition to eligibility for a pension as fulfilling the existing statutory age and length of service requirements.

In the public sector, pensions are not merely a form of deferred compensation. They are a "reward for faithfulness to duty and honesty of performance."

A public servant who, by engaging in serious criminal misconduct, abuses the power of office and violates the fiduciary duty owed to the public relinquishes any claim to a pension financed by the tax paying citizens of this state.

The purpose of a pension forfeiture statute is to withhold public tax dollars from the employee who has broken faith with the public and breached in a significant way the fiduciary duty owed to the citizens of the state.

Five other states -- Pennsylvania, Florida, Georgia, Illinois and Massachusetts -- have all enacted pension forfeiture statues which recognize that loyal, honest public service is an essential prerequisite to pension eligibility. In these five states, criminal misconduct related to a public employee's official duties operates to sever the employee's claim to a taxpayer-financed pension.

Legislative history

2010: This bill was referred to the Senate Civil Service & Pensions Committee.

Fiscal implications

This bill would save taxpayer dollars by decreasing the fiscal obligations of the retirement systems in these situations.

Effective date

This act would take effect immediately and would apply to all retirement system members who join on or after such date.