O'Brien, Havey and Stern. O'Brien, J.A.D., dissenting.
Petitioner Elizabeth R. Steinmann appeals from a final determination of the New Jersey Teachers' Pension and Annuity Fund (TPAF) denying her request to convert her ordinary disability retirement plan to an early service retirement. On appeal she contends that TPAF's failure to render its final determination within 45 days of the ALJ's initial decision, which recommended approval of petitioner's request, made the ALJ's recommendation a final decision pursuant to N.J.S.A. 52:14B-10(c). In the alternative, she argues that TPAF's denial of her request to convert was arbitrary, capricious and unreasonable. We reject both contentions and now affirm.
Petitioner enrolled in TPAF when she began her teaching career on September 1, 1957. Her membership continued until retirment in March 1983. Petitioner sustained work-connected injuries in April 1981 and filed a petition for workers' compensation benefits. On January 31, 1983 she applied to TPAF for accidental disability retirement. Prior to filing the application, petitioner received a "benefits" booklet from TPAF which described eligibility requirements for accidental disability retirement as well as ordinary disability retirement. It also described eligibility requirements for early retirement benefits,
including entitlement to full benefits upon 25 years of service, regardless of age. The book also explained that if the retiree:
On petitioner's application for accidental disability benefits she was asked whether she had filed for workers' compensation benefits, and if so, what benefits she was then receiving. The application also noted:
Petitioner disclosed on the application that she had filed a compensation claim and was receiving $58 temporary benefits weekly.
On December 19, 1983, petitioner's application for accidental disability retirement was denied. However, pursuant to N.J.S.A. 18A:66-39b, TPAF granted her ordinary disability retirement benefits effective March 1, 1983. On February 7, 1984 the Division of Pensions advised petitioner of her option to change from an option 1 allowance which paid $800.72 monthly to a maximum allowance of $908.57. The notice also contained the following reminder:
Please note that if you are receiving any periodic Worker's Compensation payments after the effective date of your retirement, your retirement allowance could be subject to a reduction. You must advise this office if and when you receive any Worker's Compensation Benefits.
On February 18, 1984 petitioner elected the maximum allowance.
On July 10, 1984 petitioner recovered a workers' compensation award of partial permanent benefits totalling $44,775. She
thereupon notified TPAF of the award. On January 7, 1985 she wrote to TPAF with the following request:
It is my understanding that my ordinary disability pension is not subject to any offset. If I am not correct in this matter, please change my pension to years in service.
The Division of Pensions responded on September 25, 1985, advising petitioner that her monthly allowance was being reduced to $559.88 per month because of the workers' compensation set-off. She was also advised that she could not convert to an early retirement plan because TPAF had already approved the ordinary disability retirement.
On November 7, 1985 petitioner made formal application to TPAF for a conversion to a early retirement plan. Under that plan, petitioner would have received $752.93 monthly instead of the reduced amount of $559.88. TPAF denied the request, stating that once a retirement plan became effective, "the choice is irrevocable." Petitioner appealed.
In his initial decision of November 17, 1986, the ALJ recommended reversal, concluding that TPAF had not dealt fairly with petitioner in failing to apprise her of her right to take early retirement in lieu of ordinary disability when her accidental disability claim was denied. The judge concluded that petitioner had demonstrated the requisite good cause and reasonable diligence to permit reopening of the retirement plan and conversion to an early retirement plan.
TPAF's time period for the rendering of final decision was extended by the OAL until January 8, 1987. On that date TPAF rejected the ALJ's recommendations and denied petitioner's conversion request by a unanimous vote. On March 5, 1987 TPAF made its written findings. It concluded that petitioner knew at the time she accepted ordinary disability retirement that the benefits would be subject to a workers' compensation set-off, that she also then knew she was eligible for the early retirement plan. It also found that since petitioner's ordinary disability retirement was being granted under N.J.S.A. 18A:66-39 upon the denial of her accidental disability application,
it had no obligation to advise her of the early retirement plan option.
We reject petitioner's procedural argument that TPAF failed to render a decision within 45 days as mandated by N.J.S.A. 52:14B-10c. That provision states that the agency shall adopt, reject or modify the ALJ's recommendations no later than 45 days after receipt, and if the agency fails to do so, the ALJ's decision shall be deemed adopted as the final decision of the agency. Here, the OAL extended the time period for TPAF's decision until January 8, 1987, and on that date the board unanimously rejected the ALJ's recommendation. N.J.S.A. 52:14B-10d requires that "[a] final decision or order adverse to a party in a contested case shall be in writing or stated in the record." TPAF's decision was "stated in the record" on January 8, 1987, within the time period as extended by the OAL. While it is true that for a decision to become effective, N.J.S.A. 52:14B-10(e) requires that it be delivered or mailed to the parties, the provision contains no explicit time constraint. See Belleville v. Coppla, 187 N.J. Super. 147, 152 (App.Div.1982). TPAF's written findings were prepared on March 5, 1987 and sent to petitioner's attorney on March 6, 1987. We are entirely satisfied that the findings supporting the decision were made within a reasonable period of time after TPAF made its decision. See id. Further, there is absolutely no showing that petitioner was in any way prejudiced by the two-month delay. In the circumstances, we see no basis to invalidate its action on this procedural ground.
We also reject petitioner's contention that TPAF's rejection of her conversion request was arbitrary, capricious and unreasonable. We are sensitive to the fact that petitioner has contributed to TPAF as a participating member for 25 years and are sympathetic to her efforts in securing the most advantageous retirement plan available. Indeed, if we were establishing regulations de novo, we might conclude that retirement
plans could be reopened at any time to provide the maximum benefits available to retirees.
However, our role in reviewing an agency's decision is narrowly circumscribed. Ordinarily, we will reverse the decision only if it is arbitrary, capricious or unreasonable or it is not supported by substantial credible evidence in the record as a whole. Henry v. Rahway State Prison, 81 N.J. 571, 579-580 (1980); Mayflower Securities v. Bureau of Securities, 64 N.J. 85, 92-93 (1973). Moreover, we are not at liberty to substitute our judgment for that of the administrative agency, see Dougherty v. Human Services Dep't., 91 N.J. 1, 6 (1982), and we must be mindful that a presumption of reasonableness attaches to the agency's action. Gerba v. Public Employees' Retirem. Sys. Trustees, 83 N.J. 174, 189 (1980); Boyle v. Riti, 175 N.J. Super. 158, 166 (App.Div.1980). Further, although we consider the ALJ's initial decision as part of the record, it is TPAF that "is the primary factfinder" and it is TPAF's decision that we review. Public Advocate Dep't v. Public Utilities Bd., 189 N.J. Super. 491, 507 (App.Div.1983); see also Hiering v. Board of Trustees of Public Employees, 197 N.J. Super. 14, 19 (App.Div.1984).
Applying the appropriate standard of review, we conclude that there is no basis to disturb TPAF's determination. We have found no statutory or regulatory authority to permit the reopening of a retirement plan once it becomes due and payable. A member is entitled to change an application for retirement at any time before his retirement allowance becomes due and payable; thereafter the retirement shall stand as approved by the board. See N.J.A.C. 17:3-6.2(a). A member's retirement allowance becomes "due and payable" 30 days after the board's approval of the application. N.J.A.C. 17:3-6.3(a). Petitioner's final retirement selection of the maximum benefits was approved as ...