TRENTON, N.J. – Assemblyman Ron Dancer is urging legislative action on his bill holding the state Division of Pensions and Benefits responsible for their errors that have caused financial hardship for hundreds of retirees through no fault of their own.
Almost 700 former state employees, who took out a pension loan before ending their employment, expected automated deductions from their benefits checks. However, as a newspaper reported earlier this month, the payments were not deducted after a series of bureaucratic failures so retirees are subject to interest and penalties.
“These are good people who did the right thing,” said Dancer (R-Ocean). “They had paperwork showing the state would withhold monthly payments prior to direct depositing their pension checks. Through no fault of their own, these retirees on fixed incomes are losing out on a decade or more of interest. There’s no reason to treat them like deadbeats. They shouldn’t be forced to pay penalties for the state’s mistakes.”
Dancer’s bill (A3882) limits a retiree’s liability to the principal and interest set by the original loan agreement.
“Some have told me they had no idea their payments weren’t being properly handled,” said Dancer. “It can be quite a shock to discover you owe thousands of dollars in fees because somebody else dropped the ball.”
One constituent learned he was on the hook for more than $7,000 in penalties and interest payments for a $700 balance on his loan which should have been satisfied years earlier.
To prevent future mistakes, Dancer’s bill requires the Division of Pensions to perform annual audits to ensure the pension system does not fail to automatically withhold monthly loan repayments.