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TRENTON — Hundreds of attorneys, engineers and other professionals who work part-time for some of New Jersey's towns and school districts are illegally accruing time toward lucrative pensions and should be removed from the rolls, the state comptroller said in a report released today.

Comptroller Matthew Boxer recommended that the Treasury Department disqualify time earned by 202 professionals since 2008, when a law purging private or independent contractors from the pension system went into effect.

Despite the statute, Boxer found that dozens of local governments have allowed professionals to continue to bank time as though they were full-time public employees, potentially padding their retirement pay and gaining lifetime medical benefits.

But he said that was only the tip of the iceberg.

For more than a year, Boxer reviewed the payrolls of 58 towns and school districts — leaving more than 1,000 others unexamined and where professionals could still be banking millions of dollars in benefits from one of the most financially distressed public pension funds in the country.

"You pass a law like this and unless the law is entirely black and white, you rely on literally thousands of local officials to interpret the law and follow through," Boxer said in an interview. "In this particular case, that follow through hasn’t happened the way it should."

"There is no excuse for the across-the-board failing that we found," he said.

In response, Gov. Chris Christie today directed the state Department of Community Affairs to require towns and school districts to certify through their annual independent audits that any worker accruing time is eligible.

The governor said he also wanted the overseers of local finances to certify compliance with the law, and threatened to withhold state aid if violations were discovered. A spokeswoman for Community Affairs, Tammori Petty, said the changes were already being undertaken.

Professionals in 57 of the 58 towns and school districts surveyed by the state Comptroller's Office were referred to the Treasury Department for potential pension abuse. (No one was referred from Bridgewater, the office said.):



Asbury Park

Avon-By-the-Sea

Belleville

Bloomfield

City of Orange

Cliffside Park

Clifton

Edgewater Park

Elizabeth Board of Education

Elmwood Park

Ewing Board of Education

Fairview

Fanwood

Garfield

Gibbsboro

Gloucester

Green Twp.

Guttenberg

Guttenberg Board of Education

Hainesport Twp

Kenilworth

Little Falls

Little Ferry

Livingston

Lyndhurst

Magnolia

Milltown

Monroe

Mountainside

North Wildwood

North Haledon

New Brunswick

North Bergen

North Bergen Board of Education

Oaklyn

Oxford

Passaic Vo Tech Board of Education

Pennsauken

Pine Hill

River Vale

Roselle Park

Runnemede

Saddle Brook

Shrewsbury

Somerdale

Union Beach

Union Twp.

Verona

Wallington

Wanaque

Weehawken

Westfield

West Orange Board of Education

Weymouth

Weymouth Board of Education

Wildwood

Wood-Ridge

A spokesman for Christie, Michael Drewniak, said in a statement the governor didn’t work to improve the pension system "only to have it abused and disregarded by those who want to do favors for their political or business connections and cronies."

A spokesman for the Treasury Department, Andy Pratt, said the names of the 202 workers, none of whom were identified in the report, would be reviewed on a case-by-case basis.

"Beyond that, there are no plans to do anything else right at the moment," Pratt said.

The review found the Division of Pensions and Benefits, which is overseen by Treasury, has only one investigator, relies on complaints or news reports, and does not proactively investigate abuse. Boxer recommended more people be assigned to improve compliance.

In most instances, Boxer found that local officials were to blame for allowing the abuses to continue.

The report found many local officials thought participants were "grandfathered" into the system after the law’s passage in 2007, while others failed to accurately differentiate between public employees or contractors.

Of the 202 ineligible workers, 176 were attorneys, 21 were engineers, four were health care professionals and one was an auditor. In some cases, the same attorneys accruing illegal benefits were advising local officials they could remain in the pension system.

"Surprise, surprise, the town attorney says he can stay in the pension system," Boxer said.

Sixteen professionals referred to the Treasury Department have either accrued the 25 years of service needed for lifetime medical benefits or are within five years of qualifying. The report found the total estimated cost of the health benefits could amount to more than $307,000.

Some professionals were accused of boosting their time in the pension system through work for several towns and school districts.

For example, the report said one attorney had been banking time for two part-time positions: $191,654 a year as Fairview Borough attorney and $50,000 as legal counsel for the Guttenberg Board of Education.

The attorney spent about half his time at his private practice, Boxer found, adding that if the person were to retire tomorrow, the annual pension would amount to $97,196. Removing the time earned since 2008 would reduce that payout by $29,420, the report said.

"These dubious enrollments jeopardize the fiscal integrity of (the pension system) and its long-term ability to provide pension benefits to deserving public employees," the report said.

Assemblywoman Donna Simon (R-Somerset) said in a statement she planned to introduce legislation levying a fine on any town or school district that failed to review contractors and remove those ineligible.

The executive director of the New Jersey League of Municipalities, Bill Dressel, offered no defense of local officials, but said he was hopeful that the problems were being corrected.

"The law is clear," Dressel said.

Related coverage:

• State report says North Bergen, Guttenberg violating pension sign-up rules for independent contractors

• League of Municipalities president calls on Legislature for pension, benefit reform

• N.J. municipalities face $825M in liability for workers' accumulated sick and vacation days

• Christie's overhaul may not save N.J. pension system

• Gov. Chris Christie signs N.J. public worker pension overhaul bill

• N.J.'s failure to make full pension payments hinders fund