Chapter 15 | Perjury | Pension

15. PUBLIC EMPLOYEE PENSION FORFEITURES ACT 15.1 Introduction 15.2 Crimes Leading to Forfeiture 15.3 Public Employees and Public Officials 15.

4 Crime’s Relation to Employment 15.5 Retroactivity and Contract Law 15.6 Conviction 15.7 Restitution Orders 15.8 Enforcement 15.9 Conclusion 15.10 The Statute 15.1 Introduction On July 8, 1978 Pennsylvania enacted a pension forfeiture statute titled the “Public Employee Pension Forfeiture Act.”1 More commonly known as “Act 140,” the statute consists of five (5) sections: • § 1311: the Short Title, • § 1312: Definitions, • § 1313: Disqualification and Forfeiture of Benefits, • § 1314: Restitution for Monetary Loss, and • § 1315: the Repealer. The primary operative provision of the statute states that: [N]o public official or public employee nor any beneficiary designated by such public official or public employee shall be entitled to receive any retirement or other benefit or payment of any kind except a return of the contribution paid into any pension fund without interest, if such public official or public employee is convicted or pleads guilty or no defense to any crime related to public office or public employment.

1

Fully known as the Public Employee Pension Forfeiture Act, Act of July 8, 1978, P.L. 752, No. 140, 43 P.S. §§1311–1315.

While this passage may constitute the crux of the statute, and will be the primary focus of this chapter, the Act also includes many minutiae that can serve to confound practitioners until they have a firm grasp of the breadth of Act 140. To help give lawyers a practical guide for applying Act 140, this chapter will present actual and probable cases and questions with which courts and lawyers will likely have to deal. For example, can a cafeteria worker contributing to a pension plan forfeit her benefits if she is convicted of a failure to make required disposition of funds she received working as a tax collector (See Matthews below)? Act 140 is both fair and harsh. It is fair in the sense that it gives reparation to employers, the Commonwealth, and the public when those entrusted with the public’s faith abuse their positions; it is harsh in the sense that it indiscriminately applies the same punishment despite what many would consider varying degrees of severity on the part of the lawbreaker. With this in mind, practitioners will need to give difficult advice to clients who will be faced with the possibility of losing their pensions—perhaps their only means of livelihood after retirement. Chapter 15 will first explore the types of crimes that Act 140 enumerates that will lead to a forfeiture. The next section will examine closely who the legislature meant by the terms “public official” and “public employee,” and explore how a crime must be related to their employment for forfeiture to occur. Next the chapter will discuss what it means to be convicted of one of the enumerated crimes for the sake of the statute, and discuss some of the attacks made on the statute shortly after it was passed. Finally the chapter will discuss where the monies are disbursed following forfeiture, and what provisions, if any, are in

however. the legislature enacted a statute not designed to be principally punitive in nature. a school bus driver could kidnap a busload of children and not risk forfeiting his pension. even if the victims of those crimes were under the charge of the perpetrator. For example. public officials and public employees are often in untoward positions in which to procure or give bribes relating to political matters. sex. which had in effect. chose to snub some of the more obvious crimes that might have been included. There might have been many reasons for why the legislature chose to leave many conspicuous crimes out of the Act. and public officials and public employees are in opportune positions to tamper with public records or information. Likewise. The legislature. For example.place to assure that those who need to know about members in violation of the Act are informed. There . it seems clear that by enumerating a select group of forfeiture crimes.2 Crimes Leading to Forfeiture Most or all of the forfeiture crimes seem to have some sort of logical connection to the public nature of the employment of the individual. Generally speaking. a public employee might be privy to insider information that would give him an advantage to wager on some sort of official action. charged the employee with its trust. the crimes that result in forfeiture are crimes that in some way violate the public trust that has been given to the public employee by way of his job. but rather compensational to repay the public. crimes of violence. however. which a non-public employee or official would not have. 15. or drugs are not covered by the Act. The enumerated forfeiture crimes relating to these criminal behaviors all have a logical reason to be included since public employees and officials have uncommon access to commit these types of crimes.

• Theft by Extortion. not all theft crimes are covered in the statute. For example. C. Misapplication of Entrusted Property and Property of Government or Financial Institutions. § 3927. § 3923. Theft by Unlawful Taking. § 3926. and • Theft by failure to make required disposition of funds received.S. § 3921 will not result in forfeiture. 18 Pa. and must be at least a second degree misdemeanor to be a forfeiture crime. 18 Pa. The remaining forfeiture crimes are as follows: • Section 4101 (relating to forgery) • Section 4104 (relating to tampering with records or identification) • Section 4701 (relating to bribery in official and political matters) • Section 4702 (relating to threats and other improper influence in official and political matters) • Section 4902 (relating to perjury) • Section 4903(a) (relating to false swearing) • Section 4904 (relating to unsworn falsification to authorities) • Section 4906 (relating to false reports to law enforcement authorities) . C. • Theft of Services. Other than these four (4) theft crimes. so long as they rise to a culpability level of at least a first degree misdemeanor. § 4113.S. The crime committed must be specifically enumerated and variations of a type of crime will not suffice for forfeiture. while the following.are 22 enumerated crimes in § 1312 of Act 140 that will result in a forfeiture of pension benefits should a public employee or public official be convicted of one or more of them. § 3922. is the only other enumerated crime that has a culpability threshold. will: • Theft by Deception.

To date. the “substantially similar” clause in Act 140 will remain open to constitutional attack for being vague and for giving the legislature additional unauthorized authority. Ct. State Employes' Retirement Bd.2 Roche is one of the few cases that addresses the “substantially similar” issue though more cases that more concretely define the phrase “substantially similar” are imminent.2d 640 (Pa. victim or party) • Section 5101 (relating to obstructing administration of law or other governmental function) • Section 5301 (relating to official oppression) • Section 5302 (relating to speculating or wagering on official action or information) • Article III of the act of March 4. In Roche v. Commw. the court overturned a lower court ruling that denied the appellant pension benefits because his federal crime of false declarations before a grand jury or court was not substantially the same as the state crime of perjury. No. however.. “all criminal offenses as set forth in Federal law substantially the same as the crimes enumerated herein” cause forfeiture.. What exactly constitutes a substantially similar federal offense has not yet been clearly decided by the courts. courts have not yet reached these issues.. 2).L. State Employes' Retirement Bd. 2 Roche v. 6. 1999) . Until then.• Section 4909 (relating to witness or informant taking bribe) • Section 4910 (relating to tampering with or fabricating physical evidence) • Section 4911 (relating to tampering with public records or information) • Section 4952 (relating to intimidation of witnesses or victims) • Section 4953 (relating to retaliation against witness. known as the “Tax Reform Code of 1971” The statute also has a “substantially similar” provision that states that in addition to the enumerated forfeiture crimes. however. 1971 (P. 731 A.

writing for the court.In addition to being convicted of one of the 22 enumerated crimes. and claimed that because she was a “rank and file” worker she was not bound by Act 140.”3 15.S. Rarely has a defense been raised that an employee does not fall under the heading of public official or public employee. Perhaps because the statute specifically mentions judges and justices of the peace and does not enumerate the other employees or officials who are subject to the statute. Ms. State Employes’ Retirement System. Ms. Apgar asked the court to distinguish between a “judge” and a “rank and file” worker. In Apgar v. it does not appear that there is any real practical difference between the two (2) terms. the crime committed must be committed by a public official or a public employee and the crime must be “related to public office or public employment.2d 185 (1994) .3 Public Employees and Public Officials While areas of interpretation exist for the terms “public official” and “public employee” collectively. President Judge Collins. She implied in her argument that a mere rank and file employee does not rise to the level of a public official or public employee—terms from the Act that at the time seemed to have been applied to an uncanny number of judges in Pennsylvania pension benefits forfeiture cases. Apgar believed she could challenge her inclusion under the statute because she was neither a judge nor justice of the peace. 3 4 43 P. In any event the terms have no substantial difference in meaning and will be treated as though they are the same. however. § 1312 (2004) 655 A.4 however. Perhaps the legislature included both terms in the statute in an attempt to be inclusive and to prevent any argument that a defendant could be a public employee while not technically a public official.

vocational school district. incorporated town. borough. committees. municipal authority.” 5 6 7 Id at 188 CITE 43 P. home rule. therefore.”5 President Judge Collins must have been speaking figuratively when he said that the Act specifically includes “rank and file” employees. optional plan or optional charter municipality.disagreed. so long as the employee or official is a member of a retirement system that is funded in any way by public monies. find that petitioner is bound by the Act by virtue of her being an employee of the Commonwealth. or entities thereof designated to act in behalf of a political subdivision either by statute or appropriation. commissions. writing for the court: “We note that the Act specifically includes judges as well as ‘rank and file’ employees.7 So too does the statute list the individuals who do not fall under the statute. By definition the statute applies to: Any county. Section 1312 states that the terms public employee and public official “… shall not include independent contractors nor their employees or agents under contract to the Commonwealth or political subdivision nor shall it apply to any person performing tasks over which the Commonwealth or political subdivision has no legal right of control …. city. § 1312 . he falls under the dominion of the Act. We. Whether a janitor or judge. The Act clearly states. and any agencies. departments.S. township. instrumentalities. that “all persons who are members of any retirement system funded in whole or in part by the Commonwealth or any political subdivision … are deemed to be engaged in public employment”6 and are therefore within the reach of the statute. however. intermediate unit. because those exact words do not appear in the Act. school district. boards.

This term shall not include independent contractors nor their employees or agents under contract to the Commonwealth or political subdivision nor shall it apply to any person performing tasks over which the Commonwealth or political subdivision has no legal right of control. this term shall include all persons who are members of any retirement system funded in whole or in part by the Commonwealth or any political subdivision. 588 (1993) citing 43 P. § 2. However. P. Const. in Shiomos v. State Employes’ Retirement Board8 addressed the issue of whether the defendant qualified as a public employee or official before moving on to the constitutional questions in the case. 140. Pa. . courts nevertheless nearly always undergo an analysis to assure that the employee or official qualifies for forfeiture under the Act. For the purposes of this act such persons are deemed to be engaged in public employment. the court wrote: The Act defines “Public Official” or “Public Employee” as: “Any person who is elected or appointed to any public office or employment including justices.L. since such a determination is usually easily made. No.10 (emphasis added by the court) 8 9 533 Pa. prohibited by the Pennsylvania Constitution. The Pennsylvania Supreme Court. judges and justices of the peace and members of the General Assembly or who is acting or who has acted in behalf of the Commonwealth or a political subdivision or any agency thereof including but not limited to any person who has so acted and is otherwise entitled to or is receiving retirement benefits whether or not compensated on a full or part-time basis. for example. § 1312. 1.S. § 17 10 Id at 593.While rarely do the parties raise the issue whether they qualify as public officials or public employees. art. Shiomos was a judge convicted of extortion who challenged his forfeiture on grounds that his pension had vested and any forfeiture would be considered a breach of contract.9 Citing Act 140.

The court did not engage in further discussion of the issue other than to say that a senior judge11 “clearly fit within the definition of ‘public official’ or ‘public employee’. The two instances of extortion for which charges were brought against him combined netted him $600. Her 11 Judge Thomas N. 12 Id at 593. 1986 his assignment as senior judge was revoked by the Pennsylvania Supreme Court and he was forever barred from judicial office.2d 971. and he had reached the required age and completed the required number of years. Only then did the court go on to answer the constitutional question in the case.S. he began receiving a gross monthly annuity of $1. He had already been receiving his pension when he took the position as a senior judge and the court held that his acceptance of the position effectively renewed his standing as a public employee. The Matthews case presented an interesting hitch in the typically clear-cut determination of who qualifies as a public employee. Ct.61 and subsequently assumed status as a senior judge. Sch. LEXIS 796 (Pa. 2002 Pa. and despite his already having received benefits.C. v.883. Despite the fact that Shiomos’s contract with the State was executed. It was undisputed that Matthews had been elected to the position of tax collector and that that position fell into the definition of “public employment. § 1951). the court found that Shiomos forfeited his pension retroactively to the time he was convicted of one of the enumerated crimes in Act 140. On November 18. Upon retirement in 1984.” It was also undisputed that she was convicted of theft by failure to make required disposition of funds—one of the enumerated criminal offenses that forfeits retirement benefits. however. Matthews13 the court determined that any person who is elected to any public office or employment qualifies as a public employee or public official. 2002) . Commw. Matthews clearly would have fallen under Act 140 and forfeited her retirement benefits. 1979. her position as a tax collector did not include a pension plan. It found that Shiomos was subject to Act 140 despite his protestations regarding contract law and the Pennsylvania Constitution— issues that are discussed more thoroughly in Chapter 5. He was thereafter convicted in the United States District Court for the Eastern District of Pennsylvania of two counts of extortion under the Hobbs Act (18 U. 13 806 A. Shiomos’ entitlement to retirement benefits vested on July 30. ”12 and let its emphasis on pertinent parts of the statute speak for itself. Had these been the only pertinent facts of the case. Employees’ Retirement Bd. In Pub. Commw.

14 It is possible. the public official or public employee must have first been convicted of one or more of the 22 enumerated crimes and those crimes— not the monies paid into the pension fund—must be related to the public office or public employment. before a retirement board can withhold a public employee or public official’s pension benefits. The court determined that though the crime she committed related to her position as a tax collector.4 Crime’s Relation to Employment As the Matthews case illustrates.S. that a public employee or public official could commit all 22 enumerated crimes in Act 140 and so long as those crimes were unrelated to the public position the individual held. a public employee could. did. 14 43 P.position as a cafeteria worker. monies forfeited need not be related to the crime committed or even the public office held by the public employee or public official. he would not forfeit his pension. 15. must be related to the public office or public employment. by virtue of the state pension benefits she accrued through her position as a school cafeteria worker. then. Section 1312 of Act 140 defines “crimes related to public office or public employment” as: Any of the criminal offenses as set forth … [in] Title 18 (Crimes and Offenses) of the Pennsylvania Consolidated Statutes or other enumerated statute when committed by a public official or public employee through his public office or position or when his public employment places him in a position to commit the crime …. In summary. forfeit her retirement benefits. however. however. The crime or crimes committed. § 1312 (2004) .

inter alia.18 Following a plea agreement. He then requested an administrative appeal of the decision and an adjudication by the board.To date there have been no cases that rejected forfeiture solely because the crimes were not related to public office or public employment. 643 . and he was later determined to have made “false declarations before a grand jury or court.”17 in violation of 18 U. that Roche’s crime was committed in relation to his position as a public employee or public official.2d 640 (1999) 731 A. he became a member of the State Employes’ Retirement System (SERS).S.2d 640. Roche’s crime of false declarations before a grand jury or court was substantially similar to the Pennsylvania crime of perjury and. that said. during the course of employment. 642 20 731 A. The hearing officer issued an opinion. § 1623.19 Roche unsuccessfully appealed the decision of SERS’ Appeals Committee. He was subsequently called to testify before a federal grand jury about an incident he had witnessed while at Graterford. or both.” 19 731 A. Roche was informed that his monthly annuity payments would cease and that his retirement account would be turned over for collection of the annuity payments received by him since the date of his conviction. later adopted by the board. In Roche v. State Employes’ Retirement Board15 the appellant was employed as a correctional officer with the Pennsylvania Department of Corrections at the State Correctional Institution at Graterford. 641 17 Id at 642 18 The statute provides in pertinent part: “Whoever under oath … in any proceeding before or ancillary to any court or grand jury of the United States knowingly makes any false material declaration … shall be fined under this title or imprisoned not more that five years.16 where.2d 640.20 Roche filed an appeal to the Commonwealth Court of Pennsylvania where he argued that the federal crime of false declarations before a grand jury or court is not substantially similar to the Pennsylvania 15 16 731 A.2d 640. further.C.

”21 The decision and in particular the last sentence of the opinion made it nearly impossible to commit a crime of perjury or obstruction of justice that was related to public office or public employment. Instead. Gierschick testified. Roche also argued. and after retaining counsel Gierschick pled guilty to the perjury charge in exchange for a probationary sentence and a fine. The following year Gierschick received a letter from 21 22 731 A.crime of perjury. without counsel. The court agreed. the court ruled in the last sentence of the opinion that the Board also erred “in affirming the hearing officer’s determination that the federal crime to which Roche pleaded guilty is included within the definition of ‘crimes related to public office or public employment’ … and compels the forfeiture of his retirement benefits under section 3 of Act 140.” because his job had nothing to do with testifying before federal grand juries. Gierschick v.2d 29 (1999) .22 Gierschick. in essence. The federal grand jury subsequently indicted Gierschick for perjury.2d 640. a member of SERS. 648–649 (1999) 733 A. the federal crime of perjury is substantially similar to the Pennsylvania crime of perjury. In a related case. was a corrections officer at the State Correctional Institution at Graterford who was supposed to videotape inmates as they left a bus. he argued. that his federal crime was too far removed from his actual job at the State Institute of Graterford and did not fit the description of a crime “related to public office or public employment. State Employees’ Retirement Board. His testimony was critical to establish the veracity of the assaulted inmates’ testimony. and learned the following day that prison guards had assaulted some of the prisoners. having already disposed of the case based on Roche’s first issue. In what amounted to a judicial afterthought. before a federal grand jury that he believed he had taped the last inmates leaving the bus.

breathed new life into the enfeebled § 1312 of Act 140. Gierschick then appealed to the Board but to no avail. writing: There is substantial evidence supporting the Board’s finding that the perjury occurred when Claimant’s (Gierschick’s) public employment placed him in a position to observe the events that were later the subject of his false testimony. that it was substantially similar to the Pennsylvania enumerated crime of perjury. Based on these finding. Gierschick appealed but after hearing testimony a SERS hearing examiner concluded that Gierschick’s guilty plea for the federal crime of perjury was related to his public employment and that his benefits were therefore subject to forfeiture under Act 140. therefore.SERS notifying him that his total credited state service was forfeited as of the day after his conviction the previous year. 33 (1999) . While Claimant’s job duties may not have included testifying before a grand jury.2d 29. Act 140 did not apply to him. further. we conclude that the Board correctly determined that the crime of perjury is related to public office or public employment.23 23 733 A. Gierschick then appealed to the Commonwealth Court of Pennsylvania where he asserted that his plea of guilty to perjury did not constitute a crime relating to his public office or employment. The court disagreed and in a decision filed two (2) months after Roche. Claimant perjured himself before a federal grand jury about a work incident that Claimant both observed and videotaped. The Board concluded that the crimes to which Gierschick pled guilty did relate to his public employment and. the fact that he was before the grand jury and not at Graterford did not sever the relationship between his conduct and his public employment.

6 Conviction The triggering mechanism that acts to forfeit a public employee’s or public official’s pension benefits is a plea of guilty or no defense to. however. we reversed the Board’s decision forfeiting Roche’s pension benefits finding that the federal crime of false swearing was not substantially the same as the state crime of perjury. he wrote: In Roche. whether Roche was entitled to he pension.The court distinguished the case from Roche by pointing out that Roche hinged on the claim that the federal statute to which Roche pled guilty was not substantially similar to the Pennsylvania perjury statute—an issue not raised on appeal to the court in Gierschick. obstruction of justice or perjury unless the specific employment duties included giving testimony when required. 33 . In this case.2d 29. 34 (concurring opinion by Judge Pellegrini) 733 A. Answering the question presented to us of whether the federal crime of false swearing was substantially similar to the state crime of perjury and. any crime related to public office or public employment and enumerated in § 1312 of Act 24 25 733 A. the issue is whether a federal crime of perjury is the same as the state crime of perjury…. the Retirement Board only found and argued that the federal crime of false swearing was substantially similar to the federal crime of perjury and not that it was comparable to any of the other crimes enumerated [in § 1312]. “… would remove from the scope of Act 140 any cover-up.”25 15.24 The court’s narrow interpretation of § 1312 in Roche was greatly widened in its Gierschick ruling. In a concurring opinion by Judge Pellegrini.2d 29. if not. or upon initial conviction of. the court observed in hindsight. To rule otherwise. No other claim was made by the Retirement Board that the federal false swearing was comparable to any other disqualifying crime.

While all pension benefits paid before a conviction or a plea of guilty or no contest remain the property of the member. The statue states: [N]o public official or public employee nor any beneficiary designated by such public official or public employee shall be entitled to receive any retirement or other benefit or payment of any kind except a return of the contribution paid into any pension fund without interest.26 Should a public official or public employee wish to avoid pension forfeiture. after being convicted of two counts of extortion. the court ruled that he forfeited his nearly $1. In addition.2d 158 (1993) . SERS interprets Act 140 prospectively insomuch as only pension benefits that have not been paid to the member are forfeited. it is prudent to do so pretrial or before entering a plea. all future payments are forfeited. minus interest and any employer contributions. In other words. the State 26 27 43 P. while the plain meaning of the Act clearly states that forfeiture occurs the moment a member pleads guilty or no defense. If possible it is often advisable for the public employee or public official to plea bargain away any and all of the enumerated crimes in § 1312 with which he is being charged or risk forfeiting his pension benefits. State Employes’ Retirement Board27 for example. §1313(b) (2004) 626 A. which garnered Shiomos approximately $600.S. Section 1313(a) provides for the return of only the monies the public official or public employee paid into the fund. he risks a swift and draconian forfeiture of benefits.140. Once the member submits himself to the court by entering a plea. if such public official or public employee is convicted or pleads guilty or no defense to any crime related to public office or public employment. In Shiomos v. regardless of which of the enumerated crimes were committed or to what extent they were carried out.900a-month pension.

Additionally. 15. if sustained. then a forfeiture action cannot be brought under Act 140. Board of Pensions & Retirement. if a member is convicted of one of the enumerated crimes and subsequently wins an appeal. that guilty and no contest pleas and convictions. imposing forfeiture upon the plea of guilty or no contest would make those options considerably less attractive and contesting the charges would become more appealing. The courts were 28 29 715 A. If a verdict of not guilty is rendered or the indictment or criminal information finally dismissed.2d 528 (1998) Bellis v. or is convicted of one of the enumerated crimes. the primary challenges to Act 140 were on the grounds that the Act should not be applied retroactively and that the Act infringed on contract rights of the public employee or public official. §1313(b) of the Act states that [N]o payment or partial payment shall be made during the pendency of appeal.29 If a member enters a plea of guilty or no contest.Employees’ Retirement Board will typically wait until sentencing to impose forfeiture in case the pleas are changed or withdrawn.28 If a criminal conviction is finally dismissed.5 Retroactivity and Contract Law In the first few years following the enactment of Act 140. Section 1313(b) goes on to say. then the public official or public employee shall be reinstated as a member of the pension fund or system and shall be entitled to all benefits including those accruing during the period of forfeiture if any. will be considered a breach of contract between the member and his employer and forfeiture will ensue. any pension benefits that were withheld are reinstated with interest. however. 634 A.2d 821 . Mere allegations of criminal misconduct will not result in forfeiture. Additionally.

2d 141.faced with a number of cases that dealt with attempted forfeitures based on criminal conduct that occurred prior to July 8. 856. 1978.2d 852. “Each time a public officer or public employee is elected. State Employees’ Retirement Board31—the cases were heard together by the Supreme Court of Pennsylvania. provides that. Miller v. namely one which renders an act punishable in a manner in which it was not punishable when committed. and are dealt with in more depth in Chapter 5. “… [T]he retroactive purport of this act is such that we must find the act to be constitutionally infirm as an ex post facto law in itself. Commonwealth. State Employees’ Retirement Board and Cianfrani v. appointed. promoted. 1978—the date of enactment. and because the appellees’ pension rights had vested prior to enactment. The appellees were retired state employees whose pension rights had vested prior to the enactment of Act 140.30 the court ruled that the Act could not be applied ex post facto to crimes committed before July 8. Officers and Employees of Retirement Board. The court quickly restricted the application of Act 140.2d 1300 (1980). . The passage of time and the broad interpretation courts have given to § 1313(c) have made the challenges to retroactivity all but extinct. there is a termination and renewal for 30 411 A.2d 737 (1982). 469 A. The court held that because Pennsylvania recognizes retirement provisions for public employees as deferred compensation for service actually rendered in the past. or otherwise changes a job classification.2d 852 (1980). Challenges to the forfeiture relying on contract law still surface. 411 A. Zimmerman v. State Employes’ Retirement System. The contractual issue was addressed in Bellomini v. but who had been convicted of criminal activity while employed by the State. 411 A. Section 1313(c). they had contractual entitlement to their pension benefits. see also Burello v. State Employes’ Retirement System. and Commonwealth ex rel.” 31 445 A. State Employees’ Retirement Board. however. In Burello v.

when a member forfeits his pension plan he only receives the money he put into the fund minus interest and matching contributions. Courts have not been presented with the issue of whether a demotion or involuntary job change constitutes a change in job classification for the purpose of § 1313(c). but the State Employees’ Retirement Board has decided that changes in job title that do not affect duties or salary do not constitute a change in job classification under § 1313(c). all sums then credited to the defendant’s account or payable to the defendant including the contributions shall be available to satisfy such restitution order.”32 While possible. When. it is unclear which funds the legislature meant to make available in § 1314(c). 15. 1313(c) . it is highly unlikely that any pre1978 member will not have had a promotion or change of employment by now. however. the member’s crimes have caused either penalties to be imposed on the member or a loss of money on the part of the retirement system.7 Restitution Orders Generally speaking.S. then even the money the member paid into the fund may be forfeited in part or in whole. While it is clear that the member’s contribution to the fund can be used to pay fines and restitution. Section 1313(d) of Act 140 reads: The appropriate retirement board may retain a member’s contributions and interest thereon for the purpose of paying any fine imposed upon the member of the fund. which provides: [W]henever the court shall order restitution or establish the amount of restitution due after petition. 32 43 P. or for the repayment of any funds misappropriated by such member from the Commonwealth or any political subdivision.the contract for purposes of this act.

including the reserves funded in anticipation of the payment of the benefit. giving the member the advantage of not having to pay restitution out of his own pocket. the board shall pay the amount of the loss to the State Treasurer from the member’s contributions and the interest thereon.It would seem that this part of the Act would make it possible for the Commonwealth to draw funds from the total value of the accrued benefit. The State Employees’ Retirement Board interpretation of the Act seems to be more logical since any money paid to the Commonwealth or to the employer would really be a windfall for the employer since it would be money he would not have to pay from his own funds. In effect. While this issue is untested. Every other mention of payment of fines and restitution in the Act specifically stipulate that any monies needing to be paid come from the member’s contributions and any interest thereon. it would seem that the Commonwealth could use monies that employers had contributed to the fund to pay restitution. 15. the employer would be paying itself. (emphasis added) The State Employees’ Retirement Board seems to have recognized this potential problem and administers Act 140 as though only the members’ contributions and interest thereon are available to pay fines and restitution.8 Enforcement . Section 1313(e) states: [T]he State Employees’ Retirement Board shall not disburse any funds to any person who has forfeited their [sic] right to benefits until the Auditor General and the Attorney General have determined and certified that there has been no loss to the Commonwealth as a result of the conduct that resulted in forfeiture of benefits. If there is a loss to the Commonwealth.

SERS counselors are left to their own devices to seek out and discover potential Act 140 situations. it would seem. should any outstanding balance remain after the pension fund contribution are depleted.Enforcement of the forfeiture for the sake of the Commonwealth is left largely to the courts. there is no system in place to inform pension administrators that one of their members is subject to forfeiture of pension benefits under Act 140. however. “including the serendipitous spotting of news articles. or when a member has pleaded guilty or no contest to one of the enumerated crimes. The enforcement of Act 140 is problematic in the sense that there is a communication breakdown between the court system and pension administrators. that an employer would treat the monies owed as any other outstanding debt and simply send it to a collection agency. Employers. Deputy Chief Counsel to Pennsylvania’s State Employees’ Retirement System.” SERS. relies on a number of sources of information. he says.”33 Other than serendipity.” While the Commonwealth is specifically mentioned in the statute as receiving its fines or reimbursements through court order. Nicholas Marcucci. has suggested that this communication gap sets up the potential for a “don’t ask don’t tell” scenario where employers never discover that their employees are subject to Act 140. It is likely. Section 1314(a) of Act 140 states that “… the court shall order the defendant to make complete and full restitution to the Commonwealth or political subdivision of any monetary loss incurred as a result of the criminal offense. there is no mention of under what authority employers are supposed to receive compensation. however. Marcucci writes that “it is important that SERS counselors remain alert to potential forfeiture situations. Once a court makes a determination that a member is guilty of one of the enumerated crimes. should take a more active 33 CITE .

for the crime to produce forfeiture.role in seeking out such situations since the Act provides them with remedies to recoup losses incurred by their employees’ misconduct. it needs to be related to the member’s employment. and it has also raised the question of why many more severe crimes committed by public employees or public officials are not included and some of the more benign crimes are punishable? While certain challenges to Act 140 are slowly becoming obsolete—such as the issue of the retroactivity of the statute—other areas of attack on the Act have yet to be tapped. there would be no way of knowing. since doing so would result in the loss of their pension benefits and likely their jobs. In some regards.9 Conclusion Some might argue that Act 140 provides indiscriminate punishment regardless of the severity of the crime committed. however. While there is a strong possibility that whatever enumerated crime committed by the employee would come to the attention of the employer since. Even if an employer were to ask employees in a regular basis if they had been convicted of an Act 140 crime. The simplicity of the statute has provided courts with the opportunity to broadly interpret the Act. In a sense. It would be surprising if the statute were not attacked on grounds that it violates double jeopardy protections. there are numerous scenarios in which an employee could be convicted without an employer’s knowledge. the Act provides a rather arbitrary and overly simplistic standard for determining who forfeits his pension benefits. 15. Short of asking employers if they had recently been convicted of an enumerated crime. public employees and public officials are being . there would be no incentive for the employee to either offer the information or to be forthright when asked.

S. Courts have effectively limited the constitutional challenges against the Act.S." 43 P.punished for the actual crimes committed and then again for violating the Act. § 1312 (2004) § 1312." Any of the criminal offenses as set forth in the following provisions of Title 18 (Crimes and Offenses) of the Pennsylvania Consolidated Statutes or other enumerated statute when committed by a public official or public employee through his public office or position or when his public employment places him in a position to commit the crime: Any of the criminal offenses set forth in Subchapter B of Chapter 31 (relating to definition of offenses) when the criminal offense is committed by a school employee as defined in 24 Pa. the former judge forfeited perhaps tens of thousands of dollars in pension benefits for extorting a mere $600.S. but savvy lawyers will undoubtedly find more chinks in the courts’ rulings that allow Act 140 to defeat obligation of contracts attacks.10 The Statute 43 P. the meanings given to them in this section: "CRIMES RELATED TO PUBLIC OFFICE OR PUBLIC EMPLOYMENT. The Act could also be attacked on the grounds that it is cruel and unusual punishment. § 1311 (2004) § 1311. Short title This act shall be known and may be cited as the "Public Employee Pension Forfeiture Act.C. unless the context clearly indicates otherwise. . § 8102 (relating to definitions) against a student. As the Shiomos case demonstrates. Most of these challenges have yet to see the inside of a courtroom. but in the near future courts will likely have to respond to these and other attacks on Act 140 15. Definitions The following words and phrases when used in this act shall have.

Section 3923 (relating to theft by extortion) when the criminal culpability reaches the level of a misdemeanor of the first degree or higher. Section 4903(a) (relating to false swearing).Section 3922 (relating to theft by deception) when the criminal culpability reaches the level of a misdemeanor of the first degree or higher. Section 4902 (relating to perjury). Section 3926 (relating to theft of services) when the criminal culpability reaches the level of a misdemeanor of the first degree or higher. Section 4911 (relating to tampering with public records or information). Section 4113 (relating to misapplication of entrusted property and property of government or financial institutions) when the criminal culpability reaches the level of misdemeanor of the second degree. Section 4906 (relating to false reports to law enforcement authorities). Section 4904 (relating to unsworn falsification to authorities). Section 4104 (relating to tampering with records or identification). Section 3927 (relating to theft by failure to make required disposition of funds received) when the criminal culpability reaches the level of a misdemeanor of the first degree or higher. Section 4910 (relating to tampering with or fabricating physical evidence). Section 4909 (relating to witness or informant taking bribe). Section 4702 (relating to threats and other improper influence in official and political matters). Section 4701 (relating to bribery in official and political matters). . Section 4101 (relating to forgery).

and any agencies. Section 5302 (relating to speculating or wagering on official action or information). known as the "Tax Reform Code of 1971. no public official or public employee . commissions. "PUBLIC OFFICIAL" or "PUBLIC EMPLOYEE. borough. or entities thereof designated to act in behalf of a political subdivision either by statute or appropriation. optional plan or optional charter municipality. Article III of the act of March 4.S. school district. township." Any county. 43 P. 2). For the purposes of this act such persons are deemed to be engaged in public employment. § 1313 (2004) § 1313. Disqualification and forfeiture of benefits (a) Notwithstanding any other provision of law. 1971 (P. No. the term also includes all criminal offenses as set forth in Federal law substantially the same as the crimes enumerated herein. Section 5101 (relating to obstructing administration of law or other governmental function). committees. This term shall not include independent contractors nor their employees or agents under contract to the Commonwealth or political subdivision nor shall it apply to any person performing tasks over which the Commonwealth or political subdivision has no legal right of control. "POLITICAL SUBDIVISION." Any person who is elected or appointed to any public office or employment including justices. Section 5301 (relating to official oppression). intermediate unit. Section 4953 (relating to retaliation against witness. home rule. vocational school district. boards.L.Section 4952 (relating to intimidation of witnesses or victims). this term shall include all persons who are members of any retirement system funded in whole or in part by the Commonwealth or any political subdivision. instrumentalities. municipal authority. victim or party). However. incorporated town. judges and justices of the peace and members of the General Assembly or who is acting or who has acted in behalf of the Commonwealth or a political subdivision or any agency thereof including but not limited to any person who has so acted and is otherwise entitled to or is receiving retirement benefits whether that person is acting on a permanent or temporary basis and whether or not compensated on a full or part-time basis." In addition to the foregoing specific crimes. city. 6. departments.

If there is a loss to the Commonwealth.nor any beneficiary designated by such public official or public employee shall be entitled to receive any retirement or other benefit or payment of any kind except a return of the contribution paid into any pension fund without interest. through the Attorney General. Such conviction or plea shall be deemed to be a breach of a public officer's or public employee's contract with his employer. § 1314 (2004) § 1314. or for the repayment of any funds misappropriated by such member from the Commonwealth or any political subdivision. the Commonwealth or the political subdivision shall bring an original action for restitution. if such public official or public employee is convicted or pleads guilty or no defense to any crime related to public office or public employment. (e) Notwithstanding any other provision of this act. (b) The benefits shall be forfeited upon entry of a plea of guilty or no defense or upon initial conviction and no payment or partial payment shall be made during the pendency of an appeal. If a verdict of not guilty is rendered or the indictment or criminal information finally dismissed. or a political subdivision shall petition the court pronouncing sentence for an order establishing the amount of restitution due it. promoted. the court shall order the defendant to make complete and full restitution to the Commonwealth or political subdivision of any monetary loss incurred as a result of the criminal offense. (d) The appropriate retirement board may retain a member's contributions and interest thereon for the purpose of paying any fine imposed upon the member of the fund. If the court does not have authority to order restitution. (c) Each time a public officer or public employee is elected. Restitution for monetary loss (a) Whenever any public official or employee who is a member of any pension system funded by public moneys is convicted or pleads guilty or pleads no defense in any court of record to any crime related to a public office or public employment. the board shall pay the amount of the loss to the State Treasurer from the member's contributions and the interest thereon. appointed. then the public official or public employee shall be reinstated as a member of the pension fund or system and shall be entitled to all benefits including those accruing during the period of forfeiture if any. 43 P. the State Employees' Retirement Board shall not disburse any funds to any person who has forfeited their right to benefits until the Auditor General and the Attorney General have determined and certified that there has been no loss to the Commonwealth as a result of the conduct that resulted in forfeiture of benefits.S. (b) If the court fails to order such restitution the Commonwealth. or otherwise changes a job classification. . there is a termination and renewal of the contract for purposes of this act.

upon being served with a copy of the court's order.S. (d) The retirement board. contributions or other benefits to the extent necessary to satisfy the order of restitution. shall pay over all such pension benefits. all sums then credited to the defendant's account or payable to the defendant including the contributions shall be available to satisfy such restitution order. 43 P. § 1315 (2004) § 1315. administrator of the pension fund or employer of the defendant. .(c) Notwithstanding any law or provision of law exempting the pension account or benefits of any public official or public employee from garnishment or attachment. Repealer All other acts or parts of acts inconsistent with the provisions of this act are repealed to the extent of their inconsistency. whenever the court shall order restitution or establish the amount of restitution due after petition.

Sign up to vote on this title
UsefulNot useful

Master Your Semester with Scribd & The New York Times

Special offer for students: Only $4.99/month.

Master Your Semester with a Special Offer from Scribd & The New York Times

Cancel anytime.