In this case a cafeteria worker in the Tussey Mountain School District was also elected to be school district tax collector. When later convicted of theft by failure to make required disposition of school district tax funds, the Public School Employees Retirement System filed a court action to determine the future of her retirement benefit earned as a cafeteria worker.
Background: C.M. was a cafeteria worker with the Tussey Mountain School District (District). This position qualified her to accumulate funds within the Public School Employees Retirement System (PSERS). She was later elected to serve as tax collector for the District. She did not qualify for membership in PSERS in her capacity as tax collector.
In 1998, C.M. plead guilty to failure to make required disposition of funds received as the tax collector. The District took no action against C.M.’s PSERS retirement benefit.
PSERS was not sure what to do in this matter. C.M. was a public employee under the Public Employee Pension Forfeiture Act (Act 140), Act of July 8, 1978, P.L. 752, No. 140. As a result, she was subject to losing the PSERS pension benefit she had acquired as a cafeteria worker.
Act 140 specifically lists failure to make required disposition of funds as an offense requiring forfeiture. However C.M. was not acting as a cafeteria worker at the time she committed this offense. Consequently, PSERS was unsure of the applicability of Act 140 to these facts and it filed for a declaratory judgment with the Commonwealth Court. A declaratory judgment is a procedure where one party asks the court to issue a legal opinion on an unclear point of law which affects two different parties.
Issue before Commonwealth Court: The Court declared the issue in this case to be whether or not Act 140 requires the pension benefit earned by C.M. as a District cafeteria worker to be forfeited for conviction of an offense committed as District tax collector?
Opinion: The Court’s opinion declared both the cafeteria worker position and tax collector position are public employment. Section 2 of Act 140 identifies all persons who are members of a retirement system funded by the Commonwealth to be a public employee. In addition, Section 3(a) of Act 140 clearly prohibits a public employee from receiving retirement benefits upon conviction of theft by failure to make required disposition of funds.
As a result, the Commonwealth Court granted the PSERS motion for summary judgment against C.M. forfeiting her PSERS retirement earned as a cafeteria worker. 6-12-21
Public School Employees’ Retirement Board v. Matthews 806 A2d 971 (Pa. Commonwealth Court, 2002)
Attorney Leann T. Engler, Harrisburg, for PSERS.
No attorney appearance entered on behalf of C.M.
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