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Miller v. Trustees of

Decided: May 8, 1961.

GEORGE J. MILLER, APPELLANT,
v.
THE TRUSTEES OF AND/OR THE PUBLIC EMPLOYEES' RETIREMENT SYSTEM, DIVISION OF PENSIONS, DEPARTMENT OF THE TREASURY OF THE STATE OF NEW JERSEY, DEFENDANTS



For affirmance -- Chief Justice Weintraub, and Justices Jacobs, Francis, Proctor, Hall, Schettino and Haneman. For reversal -- None.

Per Curiam

[35 NJ Page 20] Appellant, George J. Miller, a retired State employee, sought a review under R.R. 4:88-8 in the Superior

Court, Appellate Division, of the action of the Trustees of the Public Employees' Retirement System in deducting from his monthly pension benefit the sum "payable to him" under the Federal Social Security Act. The cause was certified on our motion before argument in the Appellate Division.

Miller, a World War I veteran, joined the Public Employees' Retirement System on January 2, 1955. At that time, as a veteran, he was granted 16 years and 3 months free prior service credit. Thereafter, he made the required contributions to the fund until January 1, 1959. The State Retirement System was integrated with the Federal system established to administer the Social Security Act. See N.J.S.A. 43:15 A -1; 43:15 A -84; 42 U.S.C.A. ยง 418. Section 58 of the integration act, N.J.S.A. 43:15 A -58, provided that prior to January 1, 1960, the social security taxes of the members of the State System should be deducted from their contributions to the State fund. As a result the State System paid Miller's federal taxes until he retired. On January 1, 1959, having accumulated 20 years of creditable service in public employment and being over 60 years of age, on proper application he was retired on a pension allowance of $425. a month. N.J.S.A. 43:15 A -61.

Section 50 of the act, N.J.S.A. 43:15 A -50, sets forth the manner in which a pensioner's benefits shall be paid to him. It says:

" Subject to the provisions of Section 59 of this act, at the time of his retirement any member may elect to receive his benefits in a retirement allowance payable throughout life, or he may on retirement elect to receive the actuarial equivalent at the time of his annuity, his pension or his retirement allowance, in a lesser annuity, or a lesser pension, or a lesser retirement allowance, payable throughout life, with the provision that: * * *." (Emphasis supplied)

Then follows certain optional plans from which a choice may be made as to the method of payment under certain contingencies, such as death or choice of a form of payment not specifically listed as one of the options, but which

is approved by the Board of Trustees. Miller's election under this section was to receive the maximum monthly benefit of $425 payable throughout his life and to cease at his death.

Section 59 referred to in the section just outlined provides:

"Upon attainment of age 65 by a retired member * * * the board of trustees shall reduce such member's retirement allowance by the amount of the old age insurance benefit under Title II of the Social Security Act payable to him. Membership in the retirement system shall presume the member's acceptance of and consent to such reduction. * * *."

Following his retirement the Public Employees' Retirement System paid Miller $425 monthly through January 1960. On January 15, 1960 he became 65 years of age and thus entitled to a monthly benefit of $114 or $116 from the Social Security System. (The State and Federal figures are in conflict. We do not decide the question.) Pursuant to the long-standing administrative interpretation of section 59 that such monthly allowance constituted a benefit "payable to him," the Board of Trustees deducted $116 from its $425 monthly payment beginning February 1, 1960, and has continued to do so ever since.

Miller challenges the right of the Board to make the deduction. He maintains that the language "payable to him" under section 59 of our statute signifies money actually received by him from the Federal system. And he urges that if a person who qualifies as a social security beneficiary does not actually receive the monthly sum allotted to him for ...


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