The proceeding at the headquarters of the State Employees' Retirement System in Harrisburg involves the pension he earned while working for decades as a Penn State assistant football coach.
From a prison in southwestern Pennsylvania, Sandusky began by describing his career at Penn State and talks with school administrators about a possible continuing role with the university around the time of his 1999 retirement. His wife, Dottie, was in the hearing room for a proceeding that could last several days.
Sandusky said he decided to retire in 1999 because of an early retirement incentive that would boost his pension.
"It was an opportunity financially to be in a more secure position by retiring at that time," Sandusky testified.
He lost a $4,900-a-month pension in October 2012, the day he was sentenced to 30 to 60 years in prison for 45 counts of child sexual abuse. The decision also precluded Dottie Sandusky from collecting benefits.
The State Employees' Retirement System (SERS) ruled that his convictions for involuntary deviate sexual intercourse and indecent assault fell under Pennsylvania's Public Employee Pension Forfeiture Act. Sandusky had opted to participate in the state-sponsored retirement system while at Penn State, which is a "state-related" university, but he was not a state employee.
At the heart of the dispute is whether Sandusky's ties to the university after his retirement, including some payments, made him a "de facto" Penn State employee while committing the crimes in question.
His lawyer has argued he was not and that his employment contract was not renewed after the forfeiture law took effect in 1978 so its terms do not apply to him. Sandusky attorney Charles Benjamin has said Penn State made only six payments to Sandusky between 2000 and 2008, and three of them involved travel costs. The other three were speaking fees of $100, $300 and $1,500.
In a Dec. 9 filing, Benjamin also argued that Sandusky did not fit the definition of "school employee" under the forfeiture law.
"No reported case in the history of Pennsylvania jurisprudence has ever applied a 'de facto' employee analysis to deny someone his retirement earnings, and SERS should not bow to political pressure and 'mob rule' to deny claimant his retirement earnings," Benjamin wrote.
In recent weeks, there was a dispute over the SERS witness list, which included two former Penn State administrators facing allegations of a criminal coverup about Sandusky, former athletic director Tim Curley and former vice-president Gary Schultz. A SERS lawyer said at the start of the hearing that both men asserted their Fifth Amendment rights not to testify.
There is currently no trial date set for Curley and Schultz, who are being prosecuted in the Dauphin County Courthouse, about two blocks from the SERS headquarters.
It likely will be several months before the hearing examiner, Michael Bangs, produces his written recommendation to the retirement system board. If the board rules against Sandusky, he may appeal to Commonwealth Court.