On appeal from the Public Employees Retirement System.
Halpern, Larner and King. The opinion of the court was delivered by King, J.A.D.
[158 NJSuper Page 416] Burkhart and Garofalo appeal from adverse determinations by the Board of Trustees of the Public Employees Retirement System (PERS).
Burkhart is a veteran who began employment as a Morris County freeholder on July 1, 1973. He was enrolled in PERS, effective November 1, pursuant to an application received by the Division of Pensions on June 3. On his application for enrollment Burkhart noted that he was employed as a committeeman for the Township of Montvale from January 1, 1966 to December 31, 1973. As a veteran, Burkhart should have been enrolled in PERS for that period, N.J.S.A. 43:15A-7(b),*fn1 but was not.
Following receipt of the Certification of Payroll Deductions in July, Burkhart expressed interest in acquiring pension credit for the period of his employment by the Township of Montvale, and for his first four months as freeholder, July through October of 1973. Ultimately, the Division of Pensions advised Burkhart he was eligible to purchase such credits -- a total of seven years and eight months -- at a cost of $5,160.51. This quotation was based on his age and salary at the time of his request, a requirement the Division then deemed mandatory pursuant to N.J.S.A. 43:15A-8.
In October Burkhart objected to the high cost of the acquisition. In November he was advised that L. 1974, c. 104, § 1, which amended N.J.S.A. 43:15A-54, would permit adjustment of the cost calculation, providing certain criteria were met. Finally, on April 25, 1975, the Division advised Burkhart that if he were to provide documentation establishing that Montvale had never given him the opportunity to enroll in PERS when he became a committeeman on January
1, 1966, and that Montvale agreed to pay the necessary employer contributions, he would be permitted to acquire credit pursuant to the so-called "correction of error" provision, N.J.S.A. 43:15A-54. The Division interpreted this statute to require cost calculations based on what the member would have paid had he been enrolled initially, i.e. , age and salary for each calendar year of employment, rather than age and salary at the time of purchase. Cost of credit on this basis was $542.30. Burkhart acquired the credit for this figure.
In October 1976 Burkhart was advised by the PERS Board that his previous purchase was rescinded because the credit could be acquired by purchase under another section of the act, N.J.S.A. 43:15A-8. The Board further contended that even if the purchase were considered to have been made under N.J.S.A. 43:15A-54, it would be based on current age and salary, the same as if made under N.J.S.A. 43:15A-8. Burkhart's acquisition was vacated and his $542.30 was returned.
Garofalo is also a veteran who commenced employment as a freeholder for Morris County on January 1, 1975. He contemporaneously enrolled in PERS. He then expressed an interest in acquiring pension credit for his prior employment as a councilman for Rockaway Township from January 1, 1973 to January 31, 1975. In August 1975 the Division of Pensions advised Garofalo that he was eligible to make a purchase for the period from May 1, 1973 to December 31, 1974, thereby acquiring an additional one year and eight months credit. The cost was quoted based on his age and salary at the time of the request, a total of $1,095.40.
At the same time the Division was advised by Rockaway that Garofalo had never been told of his right to enroll in PERS and that Rockaway would pay the employer's liability if acquisition was made pursuant to N.J.S.A. 43:15A-54. On October 9 Garofalo was told by the Division that he could obtain credit if he could qualify under N.J.S.A. 43:15A-54, and the cost would be calculated based on his age
and salary as if he had been properly enrolled in PERS while a councilman during 1973 and 1974. Computed by this method the cost of the credit was $153.41. Garofalo agreed to make the acquisition on this basis. Thereafter, in February 1976 the PERS Board denied Garofalo's application under N.J.S.A. 43:15A-54 because he was eligible, under the administrative ...