As New Jersey looks to fix a state-pension system that’s billions in debt, Patrick J. Higgins and other double-dippers find new ways to squeeze it for every dollar they can.
Higgins retired this month — for a second time. So the longtime law officer will begin collecting two state pensions, totaling nearly $100,000 a year, instead of one. And Higgins is far from the only state, county, or municipal employee to profit extensively from gaming the system.
A New Jersey Watchdog examination of the underlying circumstances illustrates how public officials can legally exploit the state’s troubled retirement system, which is underfunded by $170 billion.
In 1999, Higgins retired as a state police detective. Since age 51, he has collected pension checks from the State Police Retirement System, which currently pays him $55,000 a year. SPRS rules allow members to retire after 25 years of service, regardless of age.
But Higgins never really retired. The month before that “retirement” took effect, he was hired by the Sussex County sheriff as an investigator. He quickly enrolled in another state-pension plan, the Public Employees Retirement System.
Higgins remained in PERS when he left the sheriff’s office in 2003 to join the county prosecutor’s staff in a similar position.
For 16 years, Higgins has collected a Sussex County salary — $101,696 in 2014 — plus his SPRS pension. Last year, his two streams of income from public coffers added up to $156,746.
At 67, Higgins has decided to retire again — this time as a detective sergeant in the county prosecutor’s office. But it’s not a garden-variety retirement based on his length of service.
Instead, it’s a disability retirement – a type of pension that will pay him more than he would have otherwise received.
Not much is known about Higgins’ claim, since disability records of public employees are exempt from disclosure under state law. By legal definition, he has been deemed “totally and permanently disabled … physically or mentally incapacitated from performing normal or assigned job duties or any other position (the) employer may assign.”
Higgins did not respond to New Jersey Watchdog’s request for comment.
Under the disability-pension formula, Higgins will receive roughly $43,000 a year — or 43.6 percent of his average final salary, based on his three highest years of pay from Sussex County. If he had retired based on 16 years of service credits in PERS, his pension would have been one-third less, about $29,000 per annum.
Higgins is one of many public officials who have used early retirements to take advantage of system riddled with costly loopholes. Previous New Jersey Watchdog investigations found:
The problem was acknowledged last month in the report of the New Jersey Pension and Health Benefit Study Commission, a blue-ribbon task force picked by Christie to propose reforms.
“The commission believes serious consideration should be given to reforming the early-retirement system,” it stated. “A model originally designed for police and firefighters who engage in arduous and dangerous physical activity has now evolved into a state-subsidized lifestyle choice for many public employees.”
The report cited New Jersey Watchdog’s investigations on double-dipping, but the commission did not attempt to quantify its cost.
“It has great symbolic importance … as the double-dippers have become the ‘face’ of a dysfunctional public pension system,” the study found. “For this reason, the task force should consider ways to further limit this practice.”
The report served as the cornerstone of Christie’s annual budget address last month, but there has been little legislative progress on the commission’s proposals.
Instead the debate has focused on legal challenges to the governor’s attempts to balance budgets by slashing the state’s annual pension contributions mandated by a pension reform enacted in 2011.
Mercer County Superior Court Judge Mary C. Jacobson ruled that Christie unlawfully chopped $1.57 billion from this year’s payment. The governor is appealing the decision.
Christie plans to cut an additional $1.7 billion from next year’s pension contribution. Public-employee labor unions have already filed a new lawsuit to stop the governor.
Democratic lawmakers and union leaders say they won’t act on the task force’s proposal until Christie makes the full pension payments. Meanwhile, the state’s pension crisis may be approaching a point of no return.
“The situation is not only getting worse, but it is fast approaching the point at which it will be beyond remedy,” warned the commission in its report.