On appeal from the decision of the Board of Trustees of the Teachers' Pension and Annuity Fund.
Fritz, Polow and Joelson. The opinion of the court was delivered by Polow, J.A.D.
[179 NJSuper Page 474] All eight petitioners are retired teachers receiving pension benefits from the Teachers' Pension and Annuity Fund (TPAF).
Four of them had been employed by the Delaware Valley Regional High School Board of Education (Delaware Valley) and the others by the Greenwich Township Board of Education (Greenwich). All had received additional pay for electing early retirement pursuant to contract. As a result, petitioners' pensions were increased in proportion to the increases in their average annual salaries for their last three years of employment as was duly approved by respondent Board of Trustees of TPAF. At the time their pension applications were approved, two of the petitioners were just under 60 years of age. All of the others were well into their sixties. All eight had completed long years of service. After TPAF approval, petitioners terminated their employment accordingly, some as early as July 19, 1971 and some as late as July 1977, and all received pension benefits as anticipated.
On May 16, 1979 the Supreme Court rendered its decision in Fair Lawn Ed. Ass'n v. Fair Lawn Bd. of Ed. , 79 N.J. 574 (1979), which, according to respondent, effectively voided pertinent provisions of the agreements under which petitioners had retired. Accordingly, respondent concluded that neither school board had "statutory authority for the payment of added remuneration as an inducement for retirement." Therefore, "a reduction in salary credit . . . [and] a corresponding return of pension and insurance contributions . . ." was ordered, thus reducing the retirement allowances payable to each petitioner, prospectively. Although we are satisfied that the Delaware Valley and Greenwich retirement remuneration programs as contained in the teachers' associations' collective negotiations agreements with both school boards are invalid under Fair Lawn , we also conclude that the trustees are equitably estopped from reopening the pension allowances previously approved, petitioners having irrevocably changed their positions following such approval, in reliance thereon and to their substantial detriment.
The Delaware Valley collective negotiations agreement contained the following provision:
Any teacher who states in writing that he will retire in three (3) years shall receive an additional $500 above [the negotiated salary] scale for the three (3) years before his retirement.
The Greenwich contract contained the following clause:
Any member of the Staff will receive a $300 increase for any one of the following reasons, but for one reason only:
1) After 15 years in the district and within 7 years of retirement a teacher shall receive $300 additional salary provided proper notification is given to the Superintendent. Such notification shall be given prior to November 1 preceding the year for such adjustment.
2) After 20 years teaching experience and within 7 years of retirement a teacher shall receive $300 additional salary provided proper notification is given to the Superintendent. Such notification shall be given prior to November 1 preceding the year for such adjustment.
All petitioners gave appropriate notice in accordance with their negotiated agreements, received additional compensation for their final years and were awarded retirement allowances based upon average annual compensation for ...