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In re Frank

July 12, 2007

IN THE MATTER OF PATRICIA FRANK


On appeal from Board of Trustees of the Public Employees Retirement System, Docket No. PERS 2-10-155806.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued May 1, 2007

Before Judges Skillman and Grall.

Patricia Frank appeals from a final order of the Board of Trustees of the Public Employees' Retirement System (the Board) requiring her to repay disability retirement benefits for years 2000 through 2004 in the amount of $15,954.93. The Board rejected the factual findings and legal conclusions of an Administrative Law Judge (ALJ), who determined that fairness required repayment in a reduced amount, $6411.76. We conclude that the Board improperly rejected the ALJ's credibility findings, N.J.S.A. 52:14B-10(c), and failed to give adequate weight to Frank's reliance on misinformation provided by an employee of the Division of Pensions and Benefits (Division) that was substantially consistent with information disseminated by the Division. Accordingly, we reverse.

There is no dispute that Frank received a disability retirement allowance to which she was not entitled during the relevant years. Her disqualification is based on her acceptance of new employment in a position that made her eligible to participate in the Public Employees' Retirement System (PERS). The disqualification is statutory. In pertinent part N.J.S.A. 43:15A-44 provides:

b. If a disability beneficiary becomes employed again in a position which makes him eligible to be a member of the retirement system, his retirement allowance and the right to any death benefit as a result of his former membership, shall be canceled until he again retires.

Pursuant to N.J.S.A. 43:15A-7d an employee working in a position included in PERS is ineligible for enrollment if his or her "annual salary or remuneration is fixed at less than $1,500.00." After retiring on ordinary disability, Frank accepted a new job with her former employer that made her eligible to participate in PERS and received annual remuneration in excess of the $1500 limit. On that basis she was not entitled to her retirement allowance while so employed. Frank does not dispute that point. She contends that because an employee of the Division misinformed her and her employer about the criteria for loss of her retirement allowance and because the Division delayed in bringing the disqualification to her attention, that it is not equitable for the Board to require her to repay her earnings from her part-time work, which will be a severe hardship.

Frank was born on July 24, 1935, and enrolled in PERS on January 1, 1985, after accepting employment as a custodian at the Gloucester County Vocational-Technical School. She worked in that position until she retired. On August 1, 1998, the Board determined that Frank was totally and permanently disabled so as to preclude her performance of the duties of a custodian and awarded her an ordinary disability retirement.

On September 24, 1998, Frank accepted a part-time position at the Gloucester County Vocational-Technical School as a cashier in the school's cafeteria. Prior to taking the job, Frank and her employer's payroll coordinator, Kelly Rider, contacted the Division. Frank explained that she had retired on disability and was returning to work for the same employer. She was told that she could return to work in a different position so long as her annual earnings did not exceed $9300. Rider also called the Division to inquire about Frank's ability to return to work as a part-time cashier. She too explained that Frank was a disability retiree. She was told that Frank could return to a new job if her annual earnings did not exceed $10,000, which Rider described as applicable to ordinary retirees. Rider was also told not to take pension reductions from Frank's pay. Frank's annual earnings from her part-time employment never exceeded $10,000.

A pamphlet entitled "Public Employees' Retirement System Member Handbook: July 1997" includes information relevant to reemployment of retirees. Rider gave that pamphlet to Frank. It includes the following information:

RETURNING TO A POSITION UNDER PERS -- If you accept regular full or part-time employment in a position covered by PERS and expect to receive a base salary over $10,000, you must reenroll in PERS as a condition of your employment. Your retirement allowance will be cancelled for the duration of your employment. . . .

If you return to employment under PERS and are eligible for membership and you fail to enroll, you would be required to reimburse the retirement system in the amount of all retirement benefits you received since the date you should have enrolled. . . . . . . .

DISABILITY RETIREES RESTORED TO ACTIVE SERVICE -- When you return to employment in a position covered by PERS, you enroll again in the retirement system. Deductions for pension are resumed and you are treated as active in all respects. Upon ...


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