Pennsylvania enacts tougher public pension forfeiture law

The Associated Press
Pennsylvania Statehouse

HARRISBURG – Pennsylvania’s first law of 2019 expands the list of crimes that would result in a convicted public official or government employee being stripped of their public pension.

Gov. Tom Wolf signed the bill Thursday, at a time when Pennsylvania’s state and municipal pension funds face big debts.

The legislation expands the law to apply to state and federal felonies and other crimes that could result in at least five years behind bars, on top of an existing list of crimes related to public office or public employment.

It also requires the forfeiture of pensions when a defendant pleads guilty or no contest, or is found guilty by a judge or jury. Until Thursday, the law had imposed pension forfeiture when a defendant is sentenced, leading to periods when someone who has lost their criminal case continues to receive benefits.

The bill passed both the House and Senate with just one “no” vote.

Part of the impetus for the bill was a 2017 decision by the State Employees’ Retirement Board to reinstate the pension benefits of a former state senator who pleaded guilty to federal charges.

Former state Sen. Robert Mellow, D-Lackawanna, lost a $246,000-a-year pension after his 2012 plea to a conspiracy charge for using Senate staff to work on political campaigns.

His attorneys, however, successfully argued to the pension board that Mellow’s case did not match up with state crimes that prompt pension forfeiture.

The change in law is expected to have minimal impact on the funds.

Pennsylvania’s two major public employee pension funds face $70 billion in debt while municipal pension funds face almost $9 billion in debt, based on projections by the two retirement systems and the auditor general’s office.