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Hearing Officer Recommends Sandusky Receive Pension

by on June 23, 2014 4:29 PM

A hearing officer has recommended to the State Employees' Retirement System board that Jerry Sandusky keep his pension.

Sandusky, a former Penn State football coach, saw his pension forfeited in October 2012 after a judge sentenced him to 30 to 60 years in state prison following his conviction on 45 counts of child sex abuse.

At issue is whether SERS' administrative decision to revoke Sandusky's pension under the Pennsylvania Public Pension Forfeiture Act was appropriate. In 2004, Act 140, which governs pensions for public employees, was amended to include as grounds for pension forfeiture the crimes Sandusky was convicted of -- indecent assault and involuntary deviate sexual intercourse.

Sandusky is appealing the decision in an effort to give the funds to his wife, Dottie, who still resides in State College. Ultimately, the SERS board decides what will happen with the funds.

Michael Bangs, who is presiding over the appeal process, issued a recommendation to the SERS board Friday, which says Sandusky was not technically an employee at Penn State when the crimes occurred and therefore he should be able to keep his pension.

In appeal documents, SERS' attorney Steven Bizar argued under the Forfeiture Act, any public employee who is convicted of a crime forfeits his public retirement benefits. Sandusky was convicted of crimes, which were specifically identified in the 2004 amendments of the Forfeiture Act, as being crimes that merited forfeiture of benefits.

However, Sandusky's attorney, Charles Benjamin, argues Sandusky was not a school employee when he committed the crimes that led to forfeiture of his benefits and that losing his pension violates the Pennsylvania Constitution. Specifically, Benjamin says Sandusky retired in 1999 and only worked on a "volunteer" basis for Penn State aside from a 95-day emergency hire for the 1999 football season.

Bangs agreed with Sandusky's attorney saying in his order that while Sandusky received a $168,000 payment from Penn State upon his retirement and Sandusky had a partnership with Penn State following his retirement, he was not an employee at Penn State following the emergency hire period in 1999.

Between 2000 and 2008, Sandusky received six payments from Penn State for reimbursement of travel expenses. Bangs argues those payments do not equate to "regular remuneration," which would make him an employee of the university. Additionally, Bangs says Penn State's $168,000 payment to Sandusky's at his formal retirement was a severance payment and is not considered salary.

"Because (Sandusky) was not a school employee at the time that he committed the crimes, which are subject of this action, his pension is not subject to forfeiture under Pennsylvania law," Bangs writes.

Attorneys for SERS and Sandusky can file exceptions to Bangs' opinion and to any exceptions, which may be filed. The appeal is likely to go before the board for a vote in the fall.

In January, attorneys for Sandusky and SERS presented witnesses before Bangs, including Sandusky, who testified via closed-circuit TV from state prison.

After the hearing, Bangs ordered both parties to file written arguments. In the documents, SERS' attorney Steven Bizar describes the situation as "a unique case, with a fact pattern that is unlikely to ever be repeated before this board."

Bizar says under the Forfeiture Act, any public employee who is convicted of a crime forfeits his public retirement benefits.

"Here, several of the elements necessary to prove that Sandusky has forfeited his benefits are not in dispute," Bizar argues. "For instance, it is undisputed that Sandusky was a 'public employee' solely by virtue of his SERS membership. Moreover, it is undisputed that Sandusky was convicted of crimes, which were specifically identified in the 2004 amendments of the Forfeiture Act as being crimes that merited forfeiture of benefits."

Bizar says a 1999 written agreement between Sandusky and Penn State shows Sandusky was employed at Penn State because the university paid Sandusky $168,000 in one lump sum and provided him with an office, tickets and access to Penn State's athletic facilities in exchange for a collaborative effort for outreach programs that provided positive visibility to the university's intercollegiate athletics program.

Bizar says Sandusky worked with Penn State to enhance the university's image from 1999 until at least 2009. For example, Sandusky participated in a program that included distributing hundreds of thousands of trading cards of Penn State athletes. Additionally, Bizar argues that the collaborative effort between Penn State and Sandusky's charity, The Second Mile, was another image-building initiative for the university.

Bizar also argues that Sandusky's 1999 retirement as football coach was a "sham," coordinated by Sandusky and former Penn State Athletic Director Tim Curley that allowed Sandusky to benefit from a state retirement incentive. After retirement, the university immediately rehired Sandusky as an "emergency hire" so that he could coach in the 1999 football season.

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Jennifer Miller is a reporter for StateCollege.com. She has worked in journalism since 2005. She's covered news at the local, state and national level with an emphasis on crime and local government.
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