On appeal from the Final Determination of the Board of Trustees of the Police and Firemen's Retirement System.
Botter, Pressler and O'Brien. The opinion of the court was delivered by Pressler, J.A.D. Botter, P.J.A.D., concurring.
This is an appeal from a final determination of the Board of Trustees of the Police and Firemen's Retirement System (PFRS), which administers N.J.S.A. 43:16A-11.1, et seq. (Police and Firemen's Retirement System of New Jersey). The issue presented involves N.J.S.A. 43:16A-11.2, which accords the option of a deferred retirement allowance to those members terminating their employment after ten years of creditable service prior to reaching the age of 55, provided the termination was not the result of "removal for cause on charges of misconduct or delinquency." PFRS, rejecting the contrary recommendation of the administrative law judge, interpreted this provision as resulting in a forfeiture of the deferred retirement allowance option if the election is not made within two years after termination of actual service. It accordingly rejected the application for a deferred retirement allowance made by petitioner Nicholas Fiola, Jr., more than seven years after his separation from service but prior to his reaching age 55. Fiola appeals. We reverse.
The facts are essentially uncontroverted, and PFRS concedes that but for the timeliness issue Fiola would be entitled to a deferred retirement allowance. Fiola was first employed as a firefighter by the Township of Millburn in January 1955 and was enrolled as a PFRS member in February 1955. He resigned effective July 1974, his last contribution to PFRS being made in that month. He was then 46 years old and would reach
the age of 55 in June 1983. Fiola's resignation was motivated by his alcoholism problems which had resulted in disciplinary proceedings being brought against him. The record indicates that he opted to resign rather than to face the disciplinary charges in order to avoid a discharge for cause and thereby to protect his right to a deferred retirement allowance. Correspondence between his then attorney and PFRS made clear that if he voluntarily resigned and the disciplinary proceedings were consequently dismissed, his pension rights would not be jeopardized. PFRS does not take a contrary position now.
The record also discloses that in March 1976 PFRS sent Fiola a document entitled "Member's Expiration Notice" advising that his account would expire on July 1, 1976. The notice also advised that "If you have resigned and do not plan to return to service before the date of expiration, you are eligible to apply for the withdrawal of your aggregate contributions." A withdrawal application was in fact enclosed. Also contained in the notice was this advisory:
CAREFULLY REVIEW THE REVERSE SIDE OF THIS FORM. IF YOU CAN QUALIFY FOR A RETIREMENT BENEFIT, NOTIFY US IMMEDIATELY THAT YOU WISH TO APPLY FOR A SPECIFIC RETIREMENT BENEFIT, SINCE YOUR FAILURE TO NOTIFY OUR OFFICE WILL JEOPARDIZE YOUR ELIGIBILITY FOR BENEFITS.
The reverse side of the notice form contained a list of various retirement possibilities, including service retirement for those who had already reached 55 years of age, special retirement for those who had not reached age 55 but who had 25 years or more of creditable service, deferred retirement for those who had the requisite number of years of service and who had not yet reached the age of 55, and disability retirement for those who were totally and permanently disabled from the continued performance of duties. There was also a statement of insurance benefits advising that no such benefits would be payable to a member applying for a deferred retirement allowance who died before reaching the age of 55 nor to a member under 55 who had withdrawn his aggregate contributions. No application
form was, however, included with the notice other than that pertaining to withdrawal of contributions.
Fiola did not respond to this notice, testifying at the hearing before the administrative law judge that he had no recollection of having received it. Nor did he subsequently make application for withdrawal of his contributions. Nor did PFRS tender his contributions to him. In September 1981 he first began to pursue the matter of his deferred retirement allowance and in January 1982 made formal request for an application. The denial of that request resulted in his appeal to PFRS, which referred the matter to an administrative law judge. The administrative law judge was of the view that since Fiola had not withdrawn his contributions prior to reaching age 55 he was still entitled to elect a deferred retirement allowance. PFRS disagreed, and this appeal followed.
The statutory provision in question, N.J.S.A. 43:16A-11.2, not heretofore construed in a reported decision, provides in pertinent part as follows:
Should a member, after having established 10 years of creditable service, be separated voluntarily or involuntarily from the service, before reaching age 55, and not by removal for cause on charges of misconduct or delinquency, such person may elect to receive the payments provided for in section 11 of P.L.1944, c. 255 n1 [ N.J.S.A. 43:16A-11] or section 16 of P.L.1964, c. 241, n2 [ N.J.S.A. 43:16A-11.1] or a deferred retirement allowance, beginning on the first ...