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Stevens v. Board of Trustees of Public Employees' Retirement System

November 13, 1996


On appeal from a final decision of the Board of Trustees of the Public Employees' Retirement System.

Approved for Publication November 13, 1996.

Before Judges Muir, Jr., Kleiner, and Coburn. The opinion of the court was delivered by Kleiner, J.A.D.

The opinion of the court was delivered by: Kleiner.

The opinion of the court was delivered by


We have consolidated two separate appeals from a decision of the Board of Trustees of the Public Employees' Retirement System (P.E.R.S.). The Board of Trustees rejected the recommended decision of an administrative law Judge (ALJ) and concluded that petitioner Norman Stevens was not entitled to the retirement pension benefits paid to him for the period between January 1, 1993, and January 31, 1994. The Board's Conclusion also required the Township of Bridgewater, an intervenor in the administrative proceedings, to contribute to P.E.R.S. for the same period. The ALJ had concluded that Stevens was an independent contractor during that period and, as such, was not required to participate in P.E.R.S. The ALJ's decision implicitly concluded that the municipality had no duty to contribute to P.E.R.S. during the period that Stevens provided services in his capacity as an independent contractor. In reaching its decision to reject the recommendation of the ALJ, the Board was required to interpret and apply N.J.S.A. 43:15A-57.2 as it pertains to a former employee who claims independent contractor status. We conclude that the Board failed to perform its function by not articulating precise findings of fact and then applying those facts to the pertinent statute. Without specific fact-finding, it is impossible to determine whether the Board's statutory interpretation is reasonable. We reverse and remand to the Board.


The facts in this matter are not in dispute nor were they disputed when presented to the ALJ. The interpretation of those facts, however, was substantially debated.

Stevens, who was born December 29, 1931, became the tax assessor for the Township of Bridgewater on September 1, 1974, and was immediately enrolled in P.E.R.S. Stevens retired from that position on July 1, 1992, and began to receive $1,654.43 per month as his retirement benefit. On July 2, 1992, Michael Hedden, MAI, was appointed as Bridgewater's new tax assessor.

Subsequently, Bridgewater concluded that Hedden needed assistance in performing the duties of tax assessor. Another employee in the tax assessor's office who had been expected to provide the necessary assistance was injured and was unavailable to help the new assessor. The Bridgewater Township Council adopted a resolution authorizing the mayor and township clerk to execute a "Professional Services' Agreement" with Stevens in accordance with N.J.S.A. 40A:11-5(1)(a)(i), to provide support services for the Tax Assessor's office. Pursuant to the resolution, Stevens and Bridgewater entered into a one-year professional services agreement on January 8, 1993. The term of the contract was from January 1, 1993, to December 31, 1993. Under the terms of the contract, Stevens would be paid $2,500 per month--$30,000 per year--and would "provide support services on an 'as needed' basis to the Township Assessor." The funds used to pay Stevens were not payable under the salary and wage ordinance. Nor was Stevens' salary paid out of the salaries and wages of the assessor's department. Stevens' salary was paid out of Bridgewater's township budget as "contingent." The contract clearly delineated that Stevens would receive no fringe benefits from Bridgewater and that he would not maintain regular hours but would provide services upon request of the tax assessor or other Bridgewater officials. At the end of 1993, Stevens received an Internal Revenue Form 1099 reflecting the fee paid to him under the contract.

On November 24, 1993, Marcia Sudano, the president of the Somerset County Assessors' Association, sent a letter to Nunzio Masone, in the Overview and Scrutiny Department of the New Jersey Division of Pensions and Benefits (Division), alerting the Division that Stevens was both collecting a pension and working in the Assessor's office in Bridgewater.

As a result of this letter, the Division conducted an investigation and, on January 5, 1994, determined that:

Norman Stevens is retired from P.E.R.S., however, he is working for Bridgewater Township as a support person [sic] the Township Assessor at $30,000 per year. Prior to his retirement, Norman Stevens was the Township Assessor. Other than the fact he was paid by voucher it would appear that he is still an employee of Bridgewater Township.

The Board of Trustees of P.E.R.S. (Board) at its January 19, 1994, meeting decided that Stevens had to re-enroll in P.E.R.S. effective January 1, 1993, the starting date of the personal services contract. The minutes of the meeting reflect that:

The Board based its decision upon the provisions of N.J.S.A. 43:15A-57.2 that stipulates that a member, who is reemployed in a permanent position in public employment after retiring from P.E.R.S., cannot receive a retirement benefit for the period of time they are employed. Therefore, the Board voted to cancel Mr. Stevens' retirement benefit effective January 1, 1993, retirement check dated February 1, 1993.

Stevens was notified of the Board's decision in a letter dated January 27, 1994. The letter informed Stevens that his retirement benefits were being canceled retroactively and that he would have to reimburse P.E.R.S. for the benefits that he had received. The letter also informed Stevens that he would have to pay into ...

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