On appeal from the Board of Trustees of the Police and Firemen's Retirement System, Docket No. TYPPF 1013-33N.
Before Judges Stern, Wecker and S.L. Reisner.
The opinion of the court was delivered by: S.L. Reisner, J.A.D.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued September 14, 2004
Stanley Kossup (Kossup) appeals a final determination of the Board of Trustees of the Police and Firemen's Retirement System (Board) denying him pension benefits from July 1, 1998, when he retired as City of Newark Fire Chief, through June 30, 2002, when he retired from the position of Fire Director for the City of Newark. We reverse.
This case arises from an unusual set of facts. Kossup commenced employment as a City of Newark firefighter in 1959. In 1979 he was appointed as Fire Chief, a civil service-protected operational position involving the direct supervision of firefighters, including personal attendance at multiple alarm fires. In 1988, Kossup was promoted to Director of the Fire Department (Fire Director or Director), a civilian administrative and policy position that did not involve supervising firefighting operations. Since as Director he served at the pleasure of the Mayor and had no civil service protection, Kossup took a leave of absence from his fire chief position in order to protect his right to return to that civil service position.
In 1991, the City of Newark was experiencing a severe fiscal crisis. As a result, the Mayor determined to temporarily combine the positions of Fire Chief and Fire Director and also to combine the positions of Police Chief and Police Director. At the Mayor's request, commencing in 1991, Kossup agreed to perform both the fire chief and fire director positions. He continued to receive the Director's salary, which was higher than the Chief's salary; he received no extra salary for taking on the additional duties as chief.
Kossup had enrolled in the Police and Firemen's Retirement System (PFRS) from the beginning of his employment with the City and continued to contribute while he was Fire Director. See N.J.S.A. 43:16A-3.1. When he served in the dual role of Director and Fire Chief, he contributed to the PFRS system at the lower salary rate applicable to the Chief position.*fn1 Therefore, he was accumulating pension credit based on a lower salary than if he had contributed based on the director's salary.
In 1998, when he was simultaneously serving in both positions, the PFRS Board required him to retire from the Fire Chief position, because he had reached age sixty-five. By statute, N.J.S.A. 43:16A-5, all members of PFRS must retire at that age. Accordingly, he retired as Fire Chief, effective July 1, 1998. It is undisputed that he applied for his PFRS pension based on the $85,000 salary of a Fire Chief and not based on the higher Fire Director's salary. On July 20, 1998, the Board approved Kossup's pension based on a percentage of the Chief's salary.
At the time Kossup retired in 1998, according to Mayor James, the City's financial situation had improved to the point where it was again possible to separate the Fire Chief and Fire Director positions as well as the Police Chief and Police Director positions. Because Kossup had extensive experience in firefighting and was considered the best candidate for the Director position, the Mayor re-appointed Kossup as Director, effective July 1, 1998. A Fire Captain, Edward Dunham, was promoted to replace Kossup as Fire Chief.*fn2
It is undisputed that after Kossup was appointed solely as Director, he performed only administrative and policy duties and did not perform any of the duties of a Fire Chief. However, after learning that he was continuing to serve as Director, the Board notified Kossup on November 19, 1998, that he was not eligible for retirement benefits because he remained in a title (Director) that the Board contended was covered by the PFRS system. He appealed, and after a plenary hearing, an administrative law judge (ALJ) recommended that he be allowed to collect his pension, based on the ALJ's conclusion that the Director position was not covered by PFRS.
The Board rejected the ALJ's decision, concluding that the Director's position was covered by PFRS, because N.J.S.A. 43:16A-3.1 specifically permits a firefighter promoted to Director to remain in PFRS. The Board also considered N.J.S.A. 43:16A-15.3, which provides that a former PFRS member who becomes re-employed in a PFRS covered position may not collect his PFRS pension so long as he holds that position. The Board further concluded that Kossup had not effectively retired in 1998 because he continued to perform the duties of Director.
However, in its decision, the Board also noted that while Kossup was prohibited from receiving his pension because he was in the Director's position, which was covered by PFRS, he was also prohibited from contributing to the PFRS pension fund after 1998, because he had reached the mandatory PFRS retirement age of sixty-five in 1998. ("However, since Mr. Kossup reached mandatory retirement on July 1, 1998, he cannot reenroll in the PFRS nor can he contribute to the PFRS from July 1, 1998 through June 30, 2002.") Hence when he ...