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County of Mercer v. State

Decided: March 9, 1984.


On appeal from the Public Employees' Retirement System.

Botter, Pressler and O'Brien. The opinion of the court was delivered by Pressler, J.A.D.


This controversy, which arises under N.J.S.A. 43:15A-1, et seq. (Public Employees' Retirement System (PERS)), raises the question of whether a member of the system under the age of sixty who is receiving periodic workers' compensation benefits is subject to involuntary retirement on ordinary disability on the application of the employer. We hold that in these circumstances the employer may initiate an ordinary disability retirement pursuant to N.J.S.A. 43:15A-42 notwithstanding the subsequently enacted provisions of N.J.S.A. 43:15A-25.1.

Respondent Doris Sheshelsky was employed by Mercer County (County) in 1967 and was enrolled as a PERS member in 1968. In December 1977 she was found by the Division of Workers' Compensation to be permanently and totally disabled as a result of the combined effects of her previous disabilities and her last compensable accident. She was, therefore, also awarded Second Injury Fund benefits. Since that time she has been in receipt of periodic workers' compensation payments and has not returned to work.

In December 1981, when respondent was 57 years old, the County submitted an application for her involuntary retirement on ordinary disability pursuant to N.J.S.A. 43:15A-42. On receipt of the application, PERS made inquiry of the respondent to determine the status of her compensation payments and whether she intended to initiate retirement on ordinary disability. Based on the fact that the payments were continuing and she did not intend to apply for retirement, PERS denied the County's application. The County thereupon filed a request for a formal hearing, and the matter was heard on stipulations, joint exhibits and briefs by an administrative law judge. Despite notice to her, respondent did not elect to participate in that hearing. In his initial decision, the administrative law judge

concluded that the provisions of N.J.S.A. 43:15A-25.1 did not constitute a bar to the County's option afforded by N.J.S.A. 43:15A-42 and therefore recommended that PERS consider the County's application on its merits. PERS, however, disagreed, concluding that pursuant to N.J.S.A. 43:15A-25.1 only the employee has the option to file an application for an ordinary disability retirement. It therefore rejected the County's application. We are therefore required to construe these two provisions of the statute to determine whether N.J.S.A. 43:15A-42 was modified by the later enactment and amendment of N.J.S.A. 43:15A-25.1.

N.J.S.A. 43:15A-42 provides that a member under 60 years of age who has 10 years or more of credit for New Jersey service shall be retired for ordinary disability if "physically or mentally incapacitated for the performance of duty" on his own application, on the application of the head of the department in which he is employed, or on the application of one acting in his behalf. That provision of the statute has been substantially unchanged since its enactment as part of the original pension act.

N.J.S.A. 43:15A-25.1 was first enacted in 1966 by L. 1966, c. 217, ยง 28. It then provided in full as follows:

a. If any member of the retirement system receives periodic benefits payable under the Workmen's Compensation Law during the course of his active service, in lieu of his normal compensation, his regular salary deductions shall be paid to the retirement system by his employer. Such payments shall be computed at the full rate of contribution on the base salary subject to the retirement system, just prior to the receipt of the workmen's compensation benefits. The moneys paid by the employer shall be credited to the member's account in the annuity savings fund and shall be treated as employee contributions for all purposes. The employer will terminate the payment of these moneys when the periodic benefits payable under the Workmen's Compensation Law are terminated.

The member for whom the employer is making such payments, will be considered as if he were in the active service and shall be permitted to continue to make contributions to purchase the additional death benefit coverage provided by section 57 of the act to which this section is a supplement.

b. No application for retirement benefits may be approved by the board of trustees while the member, applying for such benefits, is in receipt of periodic benefits under the Workmen's Compensation Law.

In 1971 paragraph (b) of this provision was amended. The import of the amendment was to permit ...

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