Office of Legislative Services
State House Annex
P.O. Box 068
Trenton, New Jersey 08625
Legislative Budget and Finance Office
Phone (609) 847-3105
Fax (609) 777-2442
www.njleg.state.nj.us
LEGISLATIVE FISCAL ESTIMATE
ASSEMBLY, No. 4641
STATE OF NEW JERSEY
220th LEGISLATURE
DATED: OCTOBER 5, 2022
SUMMARY
Synopsis: Requires public officer or employee forfeit pension upon conviction
of certain offenses; alters factors determining honorable service; opens
pension to garnishment upon conviction of select crimes.
Type of Impact: Potential reduction in liability and cost for State and locally
administered retirement systems; potential recovery of
misappropriated public funds for public entities.
Agencies Affected: Division of Pensions and Benefits, Department of the Treasury.
Office of Legislative Services Estimate
Annual Fiscal Impact
State and Local Pension Cost
Reduction Indeterminate
State and Local Public Funds
Recovery Indeterminate
The Office of Legislative Services (OLS) concludes that this bill will result in additional
forfeitures of earned pension credits and pensions by order of a court or of the board of trustees
of a State or locally administered retirement system when a public employee commits a
criminal offense specified in the bill or is found to have rendered dishonorable service in
accordance with the change to the factors specified in the bill.
The bill may result in savings to the retirement systems if the interest on the member’s
contributions is not paid when the contribution is returned to the public employee after
forfeiture. The public employer contributions on behalf of a public employee whose credit or
pensions has been forfeit are retained by the retirements systems in such cases. The bill will
also result in the recovery of misappropriated public funds to public entities through the
pension garnishment permitted by the bill.
The fiscal impact of the bill cannot be determined because the number and timing of forfeitures
is unknowable, the payment of interest on returned contributions will be at the discretion of
the board of trustees, and the amount of public funds recovered through garnishment is also FE to A4641
2
unknowable. Information on prior forfeitures by the courts and boards cannot be used as a
predictor of future forfeitures. This bill will result in additional forfeitures, but overall, the
fiscal impact of the bill if enacted is likely to be marginal.
BILL DESCRIPTION
This bill would change the factors to be considered by the boards of State or locally
administered retirement systems hearing pension forfeiture cases concerning public employees. It
would emphasize the nature of the misconduct, the relationship between the misconduct and the
person’s public duties, and the person’s moral turpitude, and require the board to direct the
person’s entire pension be forfeited based on these factors. Additional factors may only be used
subsequently to mitigate this full forfeiture to a partial forfeiture. Where a forfeiture is warranted,
this bill requires that the person receive a refund of their contributions, but allows for the board to
determine whether that refund is with or without any accrued interest.
This bill would require the forfeiture of the pension or retirement benefit of a person if the
person is convicted of any crime of the first or second degree, or the equivalent under the laws of
another state or of the United States, when the offense is related to the person’s performance in or
circumstances flowing from the public office or employment held by the person. This bill also
specifies that pension forfeiture applies in cases that result in qualifying guilty or nolo contendere
pleas, in addition to convictions.
This bill would also open a person’s public pension to garnishment in order to fulfill court
ordered recovery of public funds when a person has been convicted of, or plead guilty or nolo
contendere to, certain offenses.
FISCAL ANALYSIS
EXECUTIVE BRANCH
None received.
OFFICE OF LEGISLATIVE SERVICES
The OLS concludes that this bill will result in additional forfeitures of earned pension credits
and pensions by order of a court or of the board of trustees of a State or locally administered
retirement system when a public employee commits a criminal offense specified in the bill or is
found to have rendered dishonorable service in accordance with the change to the factors specified
in the bill. The bill may result in savings to the retirement systems if the interest on the member’s
contributions is not paid when the contribution is returned to the public employee after forfeiture.
The public employer contributions on behalf of a public employee whose credit or allowance has
been forfeit are retained by the retirements systems in such cases. The bill will also result in
recovery of misappropriated public funds for public entities through the pension garnishment
permitted by the bill.
The fiscal impact of the bill cannot be determined because the number and timing of forfeitures
is unknowable, the payment of interest on contributions returned to public employees will be at
the discretion of the board of trustees, and the amount of public funds recovered through pension FE to A4641
3
garnishment is also unknowable. Information on prior forfeitures by the courts and boards cannot
be used as a predictor of future forfeitures. This bill will result in additional forfeitures, but overall,
the fiscal impact of the bill if enacted is likely to be marginal.
Section: State Government
Analyst: Aggie Szilagyi
Section Chief
Approved: Thomas Koenig
Legislative Budget and Finance Officer
This legislative fiscal estimate has been produced by the Office of Legislative Services due to the
failure of the Executive Branch to respond to our request for a fiscal note.
This fiscal estimate has been prepared pursuant to P.L.1980, c.67 (C.52:13B-6 et seq.).