New reports indicate that New Jersey pension rolls are still filled with people who shouldn’t be there. Back in 2007, a law was enacted that barred independent contractors retained through public contracts or otherwise from further earning pension gains once their agreements expired. But a report released by the state comptroller revealed wide spread abuses by politically connected professionals who padded their taxpayer-funded pensions despite their ineligibility under the 2007 law.
State Comptroller Matthew Boxer told Managing Editor Mike Schneider that abuses primarily involve professional service providers like attorneys, engineers and auditors who are considered independent contractors and not employees.
“They’ve been included on the state pension rolls even though the law makes clear that these independent contractors cannot get paid and receive a state pension,” he said.
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According to Boxer, the lack of oversight and enforcement of the 2007 law differs from town to town and from school board to school board.
“These are some towns where there’s simply confusion about what the new law required. And then in other places, we suspect there was more than simple confusion and there was an intent to try and keep somebody in the pension system even after this new rule was passed that made it clear that your town attorney, town engineer, those folks cannot be in the state pension system”
The abuses totaling more than 200 people found ineligible to be in the pension system were uncovered at 58 different sites, says Boxer.
“So when you consider we’re living in state with 19 different units of government, more than 500 towns, more than 600 school districts, it is, as you say ,the tip of the iceberg.’
The cost to taxpayers for those 200 plus people is potentially millions of dollars a year for state-funded pension benefits upon retirement. The potential windfall for those individuals is something Boxer is working to prevent.
“First and foremost, we’ve referred those 200 plus people to the state pensions board to get their pension credits removed.”
And that’s just the first step in a bigger plan to get the pension system cleaned up and straightened out.
“We’ve also recommended that the state develop a checklist to make it easier for local governments to determine who is a bonafide employee as opposed to a vendor and provide them with less excuse about being confused or misunderstanding the law.”
Reforming the system, he says, will require multiple state agencies to work together. Based on the responses he has received thus far, Boxer is confident going forward in tackling the problem.
“We’ve been very pleased with their reaction both at the pension board and with the state’s department of community affairs which governs local governments throughout the state.”
But Boxer is quick to point out that the enormity of the problem means that there is no quick fix and will take time and resources
“What we were struck with was just how across the board at local governments the law had not been implemented as it should be. And we had expected that we would see some problem areas but to see such uniformity in failing to implement the law correctly is certainly going to take some work going forward to get it straightened out.”