Before Judges Baime, Conley and A. A. Rodr¡guez.
The opinion of the court was delivered by: Rodriguez, A. A., J.A.D.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
On appeal from the Superior Court of New Jersey, Law Division, Hudson County.
The issue presented in this appeal is whether a public employee who is eligible to receive a non-contributory pension pursuant to the General Non-Contributory Pension Act, N.J.S.A. 43:8B-1 to -15, is disqualified by virtue of having joined and then withdrawn from a voluntary contributory pension fund. We hold that such employees are eligible to apply for a non-contributory pension.
Plaintiffs, long-time employees of Hudson County's Department of Human Services, appeal from a summary judgment dismissing their complaint against Hudson County, its Board of Chosen Freeholders (Board), and Eileen Prospero, the Board's Administrative Secretary (collectively "the County"). We reverse and remand.
Plaintiffs were hired prior to December 1973. In December 1973, the Legislature enacted N.J.S.A. 43:10-1.5, requiring that all future employees of certain sized first class counties (including Hudson) must join the Public Employees' Retirement System (PERS), a contributory pension fund. This section of the statute extended PERS membership to county employees not previously covered in the state retirement system. Current county employees were not required to join PERS, although they had the option to do so. Pursuant to N.J.S.A. 43:10-1.5, Hudson County adopted an implementing resolution and notified its current eligible employees that if they wished to join this contributory pension fund, they must do so by April 1, 1974, or be forever precluded.
During the application period, each plaintiff opted to join the contributory pension fund. Later, each plaintiff withdrew from the fund for personal reasons. Each received a refund of his or her contributions. Each remained a county employee.
In 1993, the Legislature relaxed the requirements of the Non-Contributory Pension Act by authorizing an Early Retirement Incentive Program. *fn1 This program allowed public employers to grant eligible employees an additional five years of service credit under PERS. Ibid. The criteria for eligibility under the incentive program includes being at least fifty years old and having at least twenty-five years of service credit. Ibid. Each plaintiff filed a timely application to receive a non-contributory pension. The County denied the applications on the ground that each plaintiff had been a member of a contributory pension from which each eventually withdrew.
The County relied on a memorandum written by the Board's counsel which stated that employees who had withdrawn from a contributory pension fund could not thereafter receive a non-contributory pension. The memorandum asserted that, An employee will not be eligible for a non-contributory pension (early retirement or regular) if they were previously a member of the County Pension Fund and withdrew from that fund.
The Non-Contributory Pension Law (N.J.S.A. 43:8B-2) excludes employees who are or were members of a pension fund (including the County Pension Fund). Resolutions adopted by the Board of Freeholders in 1956 and thereafter, consistently excluded anyone who was a member of a pension fund from receiving benefits.
Neither the Statute nor the Resolutions adopted by the Freeholders pursuant to the Statute permitted a person to withdraw funds, at any time, from the County Pension Fund and then become eligible to receive a non-contributory pension. The time or date of withdrawal is immaterial.
One of the plaintiffs, Bounds, sent a letter to the Division of Pensions. However, the Division replied that it had "no jurisdiction or administrative authority over the operation of a county pension fund."
The three plaintiffs filed complaints in an action in lieu of prerogative writs to compel the County to grant them a non-contributory pension. While this action was pending, the County granted plaintiffs a hearing. After a hearing, the Board ...