KIYC: State pension reform causes unintended consequences for retirees

In 42 years as a soccer coach at Metuchen High School, Ken Graf says his mission has been to teach athletes "to play with courage and play with integrity." (5/6/14)

METUCHEN - In 42 years as a soccer coach at Metuchen High School, Ken Graf says his mission has been to teach athletes "to play with courage and play with integrity." Now, new pension rules could force Graf off the sidelines next fall, even though he's willing to coach for free.

Graf, 64, is retiring as a middle school history teacher in Metuchen next month, but would like to remain as the high school soccer coach. However, pension officials say that under 2012 pension rules, Graf would forfeit his retirement benefits. In a letter, the state pension director says Graf is required to make "a complete termination" of his relationship with the Metuchen School District "for at least 180 days after retirement." This creates a bizarre situation in which Graf would be permitted to coach soccer next fall in any other school district in New Jersey except for the one where he's spent his entire career. In fact, when Graf offered to coach at Metuchen High School as an unpaid volunteer, pension officials denied that request as well, saying he would forfeit his pension benefits even if he coached for free.

"This rule is wrong. This rule has to be adjusted," a frustrated Graf tells Kane In Your Corner. "What is the problem with doing it voluntarily?"

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"I don't know how it's fair," Metuchen High School Athletic Director John Cathcart adds, "Especially when they're talking about how he can't even volunteer. That piece doesn't make any sense to me, and I'm as much a taxpayer as anybody else."

There's no question New Jersey needed to reign in cases of alleged pension abuse, many of which were reported by Kane In Your Corner. In 2010, Raymond O'Hare retired as a Keansburg police chief and was immediately hired as borough manager. Between his pension and new salary, O'Hare raked near nearly a $250,000 in taxpayer money. Essex County Executive Joe DiVinvenzo was even more brazen, putting in retirement papers but simply continuing to come to work, drawing both a salary and pension.  Metuchen school officials say pension officials should be targeting those kinds of cases, not forcing someone like Graf to give up coaching soccer or requiring him to do it in another town.

A spokesman for the State Treasury Department,  which oversees the Division of Pension and Benefits, puts the blame for Graf's dilemma on the IRS, saying the state's 2012 pension rules were required to bring the state into compliance with federal regulations. However, Kane In Your Corner finds the IRS simply states that retirees can only receive retirement benefits until they have experienced "a bona fide termination of employment." However, it never defines what that means. New Jersey chose to implement the six-month time limit. If Graf were working in Illinois, where the rule is two months, he'd be able to coach at Metuchen in the fall.  Kane In Your Corner also found no IRS regulation that indicates a retiree would jeopardize their pension by serving as an unpaid volunteer.

Graf, meantime, promises to spend his last two months on the job fighting to change the system. He says even if he can't change his own situation, he hopes he can help others in the future.

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