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July 13, 2012 | By | Posted in General News

Penn State boosted pension payouts for Sandusky

By Jared Sichel | PA Independent

HARRISBURG — The timing of Jerry Sandusky’s 1999 retirement from Penn State University appears to have been influenced not by discovery of his sex crimes but by a determination to help Sandusky take advantage of an early-retirement program that boosted his retirement benefits.

Emails released as part of a 267-page investigative report suggest that a state retirement program called “30-and-out” pushed the former Penn State football coach and convicted sex offender into early retirement in 1999.

Former FBI Director Louis Freeh conducted the investigation at Penn State.

 

Sandusky, 68, was charged in November with 52 counts of sexual abuse of minors. In June, a jury found him guilty on 45 of 48 counts after four of the charges were dropped. Sandusky committed multiple sex crimes against young boys on the Penn State campus during his tenure as a coach. He faces a minimum of 60 years behind bars when sentenced later this summer.

In November 2011,the Penn State Board of Trustees tasked Louis Freeh, former director of the Federal Bureau of Investigation, with leading an internal investigation into how the university responded to initial allegations that Sandusky was inappropriately touching children.

As part of the Freeh report, communication between three Penn State officials — former President Graham Spanier, former Vice President Gary Schultz, and suspended Athletic Director Tim Curley — between February 1998 and June 1999 shows that Sandusky, former football head coach Joe Paterno and the three university officials wanted to finalize Sandusky’s retirement before “30-and-out” ended on June 30, 1999. They wanted to help Sandusky receive more pension benefits from the state.

The emails in fact suggest that Penn State would have been happy to keep Sandusky as a coach “for three more seasons,” but Sandusky instead opted for retirement and the perks offered by Penn State and the state. One of those perks was an unusual $168,000 lump sum payment from the university.

Jerry Sandusky

 

The “30-and-out” incentive was a 12-month program passed by the Legislature in 1998 that encouraged early retirement for state employees. State law regarding the State Employees’ Retirement System, or SERS, rewarded people employed by the state for at least 30 years with pension benefits typically reserved for 35-year veterans, but only if they retired between July 1, 1998 and June 30, 1999.

Early retirement programs are a carrot sometimes used by governments and businesses looking to bring in younger people who earn less and to ease out older, higher-paid employees.

“Generally speaking, when employers discuss early-out windows, the intent is to reduce personnel costs,” SERS spokeswoman Pamela Hile said.

The program has not been renewed since 1999, but between 1985 and 1999 lawmakers implemented it four times, with retirement windows ranging from 12 months to more than six years.

Sandusky’s enrollment in SERS began in 1969 when he was hired by the Penn State football coaching staff. His eligibility under “30-and-out” began in 1999 upon his 30th anniversary with the school.

On Feb. 9, 1998, Curley broached the subject of Sandusky’s early retirement in an email to Spanier and Schultz.

“Jerry will have 30 years in the (state retirement) system next year, which will give him some options after next season,” Curley wrote.

In May 1998, Sandusky sexually assaulted Victim 6 in the Lasch Building. University police, although suspicious of wrongdoing, decided in June 1998 not to press charges against Sandusky. That month Schultz emailed Spanier and Curley, “I think the matter has been appropriately investigated.”

In spring 1999, a SERS newsletter reminded its members that the Jun. 30 pension cutoff date was approaching.

“The 30-and-out window…allows those active SERS members with 30 years of credited service to retire at any age and receive unreduced retirement benefits.”

A chart in the newsletter shows that the pension of a 30-year state-employee who retired on June 30, 1999 would be worth about $100,000 more than it would be if the same employee retired two days later, on July 2.

Penn State officials appear to have been cognizant of the impending deadline because, beginning in May 1999, the Freeh report reveals a burst of communications regarding Sandusky’s retirement.

A May 28, 1999, letter from Sandusky shows that he was preparing for retirement but wanted to maintain a relationship between Penn State and his youth charity, The Second Mile. That was the program through which Sandusky met many of his victims.

Around that time, Sandusky provided a “retirement requests” list to Penn State, which outlined his annuity request and various other perks. Shortly thereafter, Curley updated Spanier and Schultz on Sandusky’s decision.

“Jerry just called and said he is leaning towards the retirement window option,” read Curley’s June 13 email. “We need to respond to him asap since time is running out.”

Two days later, according to the report, Curley wrote to Spanier that Sandusky “appeared headed for taking retirement.”

With two weeks to go until “30-and-out” ended, Penn State’s outside legal counsel gave Curley a draft of a retirement agreement between Sandusky and the university. On June 21 and June 22, that agreement was adjusted to allow Sandusky lifetime use of “university weight rooms and fitness facilities” and the “training room in the East Area,” where Sandusky abused boys in the Lasch Building on multiple occasions.

On June 29, 1999, a university official hand-delivered Penn State’s official retirement offer to Sandusky’s home. The offer, signed by Curley, Schultz and Sandusky, included a provision for a lump-sum payment to Sandusky of $168,000.

The next day, the report states, “Penn State’s payroll records show that Sandusky received a $168,000 special payment on June 30, 1999”—the same day that “30-and-out” ended.

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Eric Boehm is a reporter for PA Independent. He can be reached at Eric@PAIndependent.com or at (717) 350-0963.

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