Verona Looking Into State Pension Issue
The township awaits direction from the state to determine who received pension benefits incorrectly.
A month after the state of New Jersey cited 57 communities for violating state pension laws by inappropriately paying pension benefits to part-time employees, the township of Verona is checking to see if it inadvertently violated the law.
Town officials are seeking additional guidance about payments to three part-time employees and are awaiting clarification from the state, which they expect sometime in the next two weeks, before they proceed.
Meanwhile, the township council continues to search for a solution to a 2007 state law eliminating pension benefits for certain part-time professional service providers.
It is believed Verona – and many other municipalities – did not correctly interpret the law and continued paying into the pensions of employees whose plans were eliminated under a law, signed by then Gov. Jon Corzine, intended to eliminate non-full-time employees – like attorneys, public health officials and engineers – from being able to enroll in state retirement programs.
“I was alarmed, personally,” said Councilman Michael Nochimson. “There are different opinions, but this is one of those issues that outrages people all over New Jersey, when you have people receiving benefits that they’re not entitled to…. It’s apparent that this was a violation; it can be corrected.”
According to Township Manager Joe Martin, this most recent discussion comes after a report from the state that said 57 of 58 towns surveyed had employees enrolled in pension plans incorrectly.
“You can infer that if 57 units of government out of 58 (included in the report) interpreted this law differently from state, some clarity is required,” he said.
Martin said Verona was surveyed for the report, but not specifically included, possibly because of limits on the length of the report and Verona does not have a great deal of money at stake when compared to other towns.
Total compensation for the three people with questionable pensions is below $20,000 a year. Verona contributes slightly more than $1,600 per year to the pension plan for the three employees, according to Martin.
“This is an issue that is not unique to Verona,” said Martin. “It is an issue for all 566 municipalities, all (boards of education); this is a big, statewide issue.”
According to Mayor Frank Sapienza, the issue gets more confusing because there have been five changes to the law since 2007.
“If the state is being ambiguous, then they are also being duplicitous,” Councilman Kevin Ryan said.
If it is found that the township was incorrectly paying into the three pension plans, the money will be refunded.
In addition, the service providers whose plans were eliminated will have all money refunded they personally contributed to their state pensions after 2007 and they will have all money prior to 2007 still be available to them when they retire.
Martin said litigation against the township is not a concern in Verona since the state agreed to honor the money in the plans existing before 2007.
“We are just trying to make sure there is pension money in the state available to people who are entitled to it,” said Ryan.