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In re Dennis

May 10, 2006

IN THE MATTER OF JOSEPH DENNIS


On appeal from the Police and Firemen's Retirement System, TYPPF 09054-02N.

The opinion of the court was delivered by: Kestin, P.J.A.D.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

APPROVED FOR PUBLICATION

Argued: October 18, 2005

Before Judges Kestin, Coleman and Seltzer.

Petitioner challenges the decision of the Board of Trustees (Board) of the Police and Firemen's Retirement System (PFRS) that his enrollment in PFRS was not required while he was employed as a City of Clifton police officer under the Comprehensive Employment and Training Act of 1973 (CETA), 29 U.S.C.A. § 801 to 999 (repealed 1982). The Board determined, however, that, in the circumstances, petitioner was entitled to purchase PFRS service credits for the time of his CETA employment, and the Board established the rate at which such service credits could be purchased. Petitioner, on appeal, also challenges the rate.

On May 1, 1978, petitioner was hired as a police officer with the City of Clifton (City) in a position funded by CETA, a federal program that assisted economically disadvantaged state and local governments by providing the salaries of necessary employees. Petitioner remained in the CETA program until December 31, 1980. From January 1, 1981 to June 30, 1981, the City employed petitioner as a provisional police officer. On July 1, 1981, the City appointed him to a permanent position as a public safety officer and enrolled him in PFRS.

In October 1991, petitioner requested that the Division of Pensions (Division) grant him permission to purchase service credit for the period from May 1, 1978 to June 30, 1981. By letter dated March 14, 1992, the Division responded that the cost for the credit was $16,701.18. Petitioner took no action in response to that letter.

In April 2000, petitioner again wrote to the Division and requested a statement of the cost to purchase service credit from May 1, 1978 to July 1, 1981. He requested the rate for May 1, 1978 to April 30, 1979, based on his salary on the date of the letter; and the rate for May 1, 1979 to June 30, 1981, based on his salary during that period.

The Division responded in September 2000, informing petitioner that the total cost for the service credit from May 1, 1978 to June 30, 1981 was then $28,650.86. That calculation, according to the Division, was "based on your nearest age at the time of your request and your highest salary as a member of the retirement system."

Petitioner appealed the rate to the Board. He alleged that, pursuant to N.J.A.C. 17:4.2-6(d), he should have been enrolled in PFRS on the thirteenth month of employment under the CETA program, June 1, 1979, and that he was entitled to receive service credit as a delinquent enrollee from June 1, 1979 to June 30, 1981.

The Board rejected petitioner's contention. It reasoned that N.J.A.C. 17:4-2.6(a), not (d), governed this case and, thus, petitioner had not been entitled to enrollment in PFRS until he received his permanent appointment on July 1, 1981. On that date, the City did enroll him in PFRS; thus he was not entitled to any credit as a delinquent enrollee. The Board said, however, that petitioner himself could purchase the May 1, 1978 to June 30, 1981 service credit, as the Division had determined.

In May 2002, petitioner requested a hearing. The matter was referred to the Office of Administrative Law as a contested case. See N.J.S.A. 52:14B-2(b); -9; -10. The City intervened on the side of the Board, and the parties waived oral argument before the administrative law judge (ALJ) assigned to the matter.

In an "order granting partial summary decision," rendered on October 31, 2003, the ALJ ruled agreeably to petitioner, holding that, pursuant to N.J.A.C. 17:4-2.6(d), petitioner should have been enrolled in PFRS on the thirteenth month of his CETA employment, May 1, 1979. The ALJ determined, pursuant to N.J.S.A. 43:16A-15.1, that the City was required to contribute half of the purchase rate for service credit from May 1, 1979 to June 30, 1981, plus half of petitioner's share.

The ALJ declined to set the rate of purchase and contribution for May 1, 1979 to June 30, 1981, however, on the basis of prior holdings that, in the interests of equity, a lower rate than established in N.J.S.A. 43:16A-11.4 can be set. See, e.g., Geller v. Department of Treasury, 53 N.J. 591 (1969). That statute provides a rate of purchase based on the employee's salary at the time of purchase or the highest salary the employee earned through the State. Because the record did not contain information on the circumstances surrounding petitioner's purchase requests, the ALJ reserved decision on the purchase rate until a record could be made.

At a hearing on March 9, 2004, petitioner testified that, initially, he did not recall having requested a purchase price for service credit in 1991, but after the Division produced his request letter in discovery, he acknowledged that he had made the request. Petitioner testified that he sent the April 2000 letter to the Division after speaking with a co-worker, Bob Glover, in 1999, about a then-recent decision by the Board allowing Glover to purchase service credit for his period of employment under CETA. Glover, like petitioner, had been hired by the City under the CETA program in May 1978. ...


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