Part-time attorneys' pensions under fire Trenton seeks to restrict state retirement funds

Part-time attorneys' pensions under fire
Trenton seeks to restrict state retirement funds
September 25, 2006 Star-Ledger
Local government attorneys, who for decades have parlayed part-time political appointments into generous taxpayer-funded retirements, would be shut out of the state pension system under a variety of measures gaining momen tum in Trenton.

Trustees of the retirement system for state and local government workers have asked the Attorney General to review whether any part-time professionals should qualify for the state retirement program.

"We feel this is something that needs to be revisited," said Mark Perkiss, spokesman for the state Treasury Department, which manages the retirement programs. The trustees made their request Wednesday after denying the law partner of a former Monmouth County Republican chairman pension credit for a $50,000-per-year legal assignment in Middletown, saying the post was more of a contract than a job.

Earlier last week, a bill that would strip pension credits from all part-time government workers was introduced in the Legislature.

The actions follow the publica tion last month of a list of the highest paid of 5,000 workers who are running up pension credits based on more than one public job.

The so-called Top-50 list included 25 attorneys, almost half of whom were drawing pay from five or more communities. Their combined salaries averaged about $205,000. Multiplied against their years of service, those salaries would generate pensions averaging $90,000 a year.

"Certain people are going to wonder how these jobs get cobbled together -- how there's enough time in the day," said Sen. William Gormley (R-Atlantic), a member of a special legislative panel reviewing pensions and health benefits who had requested the Top-50 list.

Gormley said he was pleased reforms are being considered.

"It sounds like the problems we are bringing up have some momen tum," he said. "It's a step in the right direction."

The practice of putting attor neys and other part-time professionals on the payrolls of towns and government agencies has been endorsed by attorneys general and the courts over past decades. But as lawmakers look for ways to control pension system costs and their impact on taxes, that policy is being questioned.

Last year, a special task force established to review state pension and benefits also recommended cutting off retirement credits for part-time professionals.

"In our opinion, these employees simply do not meet the original purpose of the public retirement plan and should not be eligible to participate in any retirement plan," the task force stated in its final report last December. To date, no action has been taken on the task force's recommendation.

Some lawyers contend that taxpayers come out ahead because at torneys who are put on salary with the promise of retirement benefits demand lower pay than they would if billing strictly by the hour.

"Most attorneys who are serving in the capacity of local judge or attorney are doing it at a lot lower rates than attorneys who are in private practice," said Richard P. Cushing, who ranked 43rd on the list with five municipal salaries that totaled $177,988 this year. "If the municipality did not offer this (pension) benefit, the rates would be substantially higher."

But not every elected official agrees.

"The situation's not given us any benefit," said Al Fuoco, mayor of Stillwater, where attorney Richard Clark draws a salary of $60,000 this year, one of the six municipal paychecks that landed Clark on the top-50 list. "Maybe we're saving a few pennies on phone calls here and there, but ultimately we're paying."

Like most of the part-time at torneys, Clark's salaries are only a portion of the total pay he collects from the communities that hire him. For trials or other matters, Clark's firm bills the towns at rates ranging from $135 to $140 per hour.

Carla Katz, president of Communications Workers of America Local 1034, the largest state workers' union, said those extra fees show the attorneys are professional vendors, and as such should not be part of the retirement system.

"It destroys the integrity, internally, of the system," she said. "It creates a sense outside in the pub lic that the pension system is being misused and abused."

Last week, trustees of the Pub lic Employees Retirement System -- the pension system that covers state and local government workers -- asked the attorney general to take a new look at whether attor neys and other part-time professionals should qualify for pension credits at all.

Their request came after considering the case of Bernard F. Reilly, a law partner of former Mon mouth County Republican Chairman William F. Dowd, who was seeking pension credit for the $50,000-a-year post of Middletown attorney.

Under terms of his agreement with Middletown, which he took over from Dowd this year, Reilly collects the salary for basic work such as attending township meet ings, drafting ordinances and fielding legal queries from government officials.

For work beyond that, Reilly and his firm charge Middletown $115 per hour, a rate that generates about $200,000 a year, he said.

Reilly, who also serves as attor ney for Atlantic Highlands and the Rumson Zoning Board, has 31 years in the state pension system. Based on the state pension for mula, each year he receives pension credit for those three jobs would boost his retirement pay by about $1,500 a year.

Reilly said he would not take issue with a change in policy to ex clude part-timers from pension benefits, but he believes it will end up costing local governments money.

"What would be the effect of it?" he asked. "It probably would end up that the rates would go up."

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