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July 03, 2014

Pension "double-dipping" stopped


Pension "double-dipping" stopped
Source: Office of the State Comptroller


On June 1, 2014, New York State Comptroller Thomas P. DiNapoli and Nassau County District Attorney Kathleen Rice announced the guilty plea of a retired police officer charged with receiving pension payments from the New York State and Local Police and Fire Retirement System in violation of law.

The investigation was made possible by a 2012 law, proposed by DiNapoli, which gave the State Comptroller access to the Sate Department of Taxation and Finance's wage reporting system to identify state retirement system retirees working for local governments whose earnings exceed post-retirement earnings limitations.

The retired officer pleaded guilty to permitting falsification of records of the retirement system, a Class D felony. As part of his guilty plea, he must repay the almost half-a-million dollars that he acquired illegally. 

Although the officer was repeatedly notified of the earnings limitations on post-retirement public employment and the requirement to report his public employment income, he chose not to do so, pocketing $465,647 in unlawful pension payments while earning a final full-time salary of $112,000 in pubic employment following his retirement from his police officer position.

The Comptroller noted that following his retirement the officer took a job at a SUNY community college without notifying his office of his return to public employment, failed to comply with the earnings limitations that apply to public retirees collecting a public pension, didn’t obtain a waiver allowing him to earn above the legal limit; and joined the State University’s Optional Retirement Program, all while continuing to receive his full retirement allowance.*

Essentially, except with respect to post-retirement payments for service while on jury duty or serving in the office of inspector of election, or as poll clerk or ballot clerk under the election law, or as a notary public or commissioner of deeds, or as a retiree elected to public office, §150 of the Civil Service Law requires the suspension of a retired public employee’s pension or annuity payments during any post-retirement public employment by a New York State agency or a political subdivision of the State. 

However, relevant provisions of the Retirement and Social Security Law, the Education Law and local law or charter permits limited earnings by a retired employee returning to public service, including such employment as a consultant, without forfeiting his or her pension payments during such employment. §211 of the Retirement and Social Security Law sets out the earning limitations with respect to the employment of retired persons without diminution of his or her pension payments while §212 of the Retirement and Social Security Law provides that there are no limitations on the amount a retired public employee returning to public service may earn on or after the calendar year in which he or she attains age sixty-five.

The case was investigated by Comptroller DiNapoli’s Division of Investigations and Division of Retirement Services jointly with Nassau District Attorney personnel.

Reports of allegations of fraud involving taxpayer money may be submitted to the State Comptroller by calling the toll-free Fraud Hotline at 1-888-672-4555, by filing a complaint online at investigations@osc.state.ny.usor by mailing a complaint to: Office of the State Comptroller, Division of Investigations, 14th Floor, 110 State St., Albany, NY 12236.

* The Comptroller said that State law, the so-called Axelrod amendment, bars a retiree's collecting a public pension from a public retirement of this State from enrolling in SUNY's Optional Retirement Program upon his or her returning to public employment..
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