On appeal from the Board of Trustees of the Public Employees' Retirement System.
Approved for Publication June 11, 1996.
Before Judges King, Landau and Kleiner. The opinion of the court was delivered by King, P.j.a.d.
The opinion of the court was delivered by: King
The opinion of the court was delivered by KING, P.J.A.D.
In this case we are required to decide if a veteran can retire from public service with pension benefits, re-enter public service several years later, and aggregate the two periods of service for pension purposes. We conclude that N.J.S.A. 43:15A-57.2 does not permit aggregating the two periods of service where there has been an intervening retirement with benefits paid out and a lapse of service, here four years.
Ray Kramer was born on August 10, 1918. A World War II veteran, he served in the armed forces from October 1942 until his honorable discharge in May 1946. He married Leilani Kramer in 1980; they had three children, now ages 16, 14 and 12. Kramer was first employed in an eligible Public Employees Retirement System (PERS) position in May 1969; he was enrolled in PERS on June 1, 1969. For over sixteen years, he held various elected positions: councilman and mayor of Asbury Park, and then freeholder of Monmouth County.
After accumulating 16 years and 7 months of service credit, he retired effective August 1, 1986 with "a service retirement under option 2." Under this option, PERS allows a retiree to take less than the maximum monthly retirement allowance but provides the same monthly allowance for a named beneficiary after the retiree's death. N.J.S.A. 43:15A-50. If the retiree elects option 2 and then dies before the named beneficiary, the named beneficiary receives a lifetime monthly allowance equal to the amount the retiree was receiving at the time of death. Kramer's wife, Leilani, was his designated beneficiary under option 2.
In November 1990, after receiving retirement benefits for four years, Kramer returned to the public sector in Monmouth County as Superintendent of Elections and Commissioner of Registration. He re-enrolled in PERS under a new account number. He was notified by the Division of Pensions in May 1991 that he qualified as a veteran under the statute. On December 10, 1991 he purchased two years and three months of military service credit at a cost of $12,548.09.
On August 1, 1992, after about one year and nine months of service, Ray Kramer again retired under an option 2 retirement, with a total of four years of service credited under his most recent PERS account, including the purchased credit. He died twenty-seven days later.
Apparently Kramer had believed that he could add the four years in his second retirement account to the 16.58 years in his first retirement account. This would have given him a total of more than 20 years service and allowed him to retire with a more favorable veteran's retirement allowance under N.J.S.A. 43:15A-61b -- one-half (50%) of his final salary. Thirty years of service is normally required for the one-half of final compensation maximum benefit (50%). N.J.S.A. 43:15A-48(b). Ray Kramer applied to purchase the veteran's retirement credit at about the same time that he completed his second application for retirement.
Leilani Kramer, his wife and named beneficiary, was notified on October 1, 1992 that she could elect to receive death benefits under either an active (lump sum) or a retired (monthly) status pursuant to N.J.S.A. 43:15A-50. She inquired about receiving a veteran's allowance under N.J.S.A. 43:15A-61b and was informed that her husband had not met the requirements for a veteran's pension. She was told that the service-credit years in his separate PERS accounts could not be aggregated because of N.J.S.A. 43:15A-57.2.
Leilani Kramer appealed the denial of veteran's benefits to the PERS Board on July 31, 1993. On August 26, 1993 the Board notified her that her appeal was denied. She then requested' a formal hearing in the Office of Administrative Law before an administrative law Judge.
In lieu of a fact-finding hearing, the parties submitted a joint stipulation of facts to the ALJ, who recommended that the Board grant veteran's retirement survivorship benefits pursuant to N.J.S.A. 43:15A-61b. The PERS Board rejected the ALJ's ...