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Bierne v. Employees'' Retirement System

Decided: October 31, 1980.


On appeal from the Superior Court, Chancery Division, Hudson County.

Allcorn, Kole and Pressler. The opinion of the court was delivered by Pressler, J.A.D.


This appeal raises a novel question of interpretation of the pension and retirement act governing the Employees Retirement System of the City of Jersey City (Retirement System), N.J.S.A. 43:13-22.1 to 22.65. The issue is whether or not that act or anything in the pension and retirement laws generally prevents a disability retiree who has reached the age of 60 and accumulated 20 years of service and who is then rehired by the city from simultaneously receiving his full retirement pension and the full salary for the new municipal position.

The relevant facts here are largely stipulated. In 1974 plaintiff Francis X. Bierne retired on disability pension from his position as tax collector. Three years later, having by then reached the age of 60 and accumulated in excess of 20 years of service, including the period of disability retirement, he was rehired by Jersey City in the position of Director of Finance at a salary substantially in excess of his disability pension. During the first six months of his employment as Finance Director he received both his salary and his disability pension. At the end of 1977, however, the Retirement System passed a resolution, purportedly pursuant to its general rule-making power accorded it by N.J.S.A. 43:13-22.63, providing for the adoption of the following regulation:

If a former member of the Jersey City Retirement system who has been granted a retirement allowance becomes employed again in a position paying a salary, his retirement allowance shall be cancelled until he again retires.

Thereupon the Retirement System ceased making pension payments to plaintiff. Plaintiff left his second period of employment by the city on January 1, 1979, and it is stipulated that the pension payments thereafter made to him were and continue to be based on his salary at the time of his first retirement. It is further stipulated that during the second period of employment he was not re-enrolled in the Retirement System or included in any other pension and retirement system.

The relief which plaintiff seeks in this action and which was denied him by the trial court is recovery of the pension payments

covering the period from the date of the resolution to the date of the second retirement. It is his position that the applicable statutes permit his simultaneous receipt of both pension and salary and that the resolution pursuant to which the pension payments were terminated was ultra vires as inconsistent with contrary statutory provision.

Preliminarily, it must be pointed out that prior to its repeal by L. 1968, c. 23, ยง 2, N.J.S.A. 43:3-1 absolutely prohibited a person from simultaneously receiving a salary for a nonelective public employment and a pension under any public pension system. Thus, a re-employed retiree was required to elect either his pension or his salary, and this consequence obtained whether the second public employment was in a position covered by his original retirement system or by a different one. See Bortel v. Cherry Hill Tp. Bd. of Ed. , 99 N.J. Super. 529 (App.Div.1967). N.J.S.A. 43:3C-1, adopted upon the repeal of the blanket prohibition, provides only that a retiree in receipt of a pension, who thereafter becomes reemployed in a public position covered by a pension fund or retirement system different from the one paying his pension or from which he is eligible to receive such a pension, may not enroll in the pension fund or retirement system covering the new position. In our view, the import of this provision is clearly that such a reemployed pensioner may simultaneously receive both his existing pension and the salary for his new position, but that when he leaves the second employment he will have accrued no pension rights in the new position and will simply continue to receive his original pension.

N.J.S.A. 43:3C-1, however, does not address the consequences of re-employment in a position covered by the same pension system. Our review of the various pension statutes persuades us that in this situation it was the legislative intention to leave the consequences of such a re-employment, vis-a-vis simultaneous receipt of pension and salary and vis-a-vis pension system re-enrollment, to be individually determined for each of the various pension systems. Thus, for example, the Public

Employees Retirement System (PERS), N.J.S.A. 43:15A-1 et seq. , has specific and detailed provisions, both predating and postdating the 1968 repeal of N.J.S.A. 43:3-1, defining the consequences of re-employment of a pensioner within the same system. See N.J.S.A. 43:15A-44 as to such re-employment of disability pensioners and 43:15A-57.2 as to such re-employment of age and service retirees. See, similarly and respectively, dealing with the Police and Firemen's Retirement System (PFRS), N.J.S.A. 43:16A-8 and N.J.S.A. 43:16A-15.3. We point out that these prescriptions provide generally, as to both PERS and PFRS, that the consequence of re-employment of a former pensioned member is the cancellation of his pension during his period of re-employment, his re-enrollment ...

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