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Demarco v. Board of Trustees of the Public Employees Retirement System

June 16, 2008

A. PETER DEMARCO, JR., PETITIONER-APPELLANT,
v.
BOARD OF TRUSTEES OF THE PUBLIC EMPLOYEES RETIREMENT SYSTEM, RESPONDENT-RESPONDENT.



On appeal from Board of Trustees of the Public Employees Retirement System, Department of Treasury.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Submitted May 20, 2008

Before Judges Skillman and Yannotti.

Appellant is presently employed as an assistant prosecutor in the Somerset County Prosecutor's office. Appellant was previously employed as an assistant prosecutor in the EsseX County Prosecutor's office and enrolled in the Public Employees' Retirement System (PERS) in May 1980. Appellant continued in that employment until April 1983, when he resigned. At that time, appellant applied to withdraw his pension contributions and received a check for $2,040.95.

Appellant was temporarily employed as an assistant prosecutor in Somerset County beginning in January 1984 and became permanently employed in that position and re-enrolled in PERS in September 1984. Appellant elected at that time not to purchase service credit for his prior period of service as an assistant prosecutor in Essex County.

Effective January 7, 2002, a statute was enacted creating the Prosecutors Part of PERS, L. 2001, c. 366, N.J.S.A. 43:15A-155 to -161, which provides more generous pension benefits than the regular PERS pension system. Shortly thereafter, appellant applied to the Division of Pensions to purchase service credit for his prior period of service as an assistant prosecutor in Essex County as well as his eight-month period of temporary service in the Somerset County Prosecutor's office. The Division quoted a price for the purchase of this prior service credit, which appellant paid in May 2002.

By letter dated May 22, 2003, the Division of Pensions advised appellant that he had been identified as a Prosecutors Part member, and that as of December 31, 2003, he had eighteen years and four months of service credit in the Prosecutors Part. By letter to the Division, appellant claimed that his Prosecutors Part service credit identified in the May 2003 letter was incorrect because it did not include the forty-eight months of service credit he had purchased in June 2002.

By letter dated June 12, 2003, the Division advised appellant that the Prosecutors Part statute did "not provide for the purchase of additional service credit." Therefore, the service credit he purchased in June 2002 had been applied to his regular PERS account.

Appellant appealed this ruling to the PERS Board. The PERS Board rejected appellant's appeal, concluding that appellant was not entitled to service credit in the Prosecutors Part for service purchased after the effective date of the statute creating that Part.

Appellant requested a hearing regarding his right to credit in the Prosecutors Part for his prior service as an assistant prosecutor and the PERS Board referred the matter to the Office of Administrative Law. The hearing before an Administrative Law Judge (ALJ) consisted of brief testimony by appellant and stipulated facts. The ALJ issued an initial decision, which concluded that the Board had correctly applied appellant's purchased service credit to his regular PERS account rather than to his account under the Prosecutors Part. The PERS Board accepted the ALJ's recommended decision and affirmed its original determination that appellant's purchased service credit did not qualify for inclusion in his Prosecutors Part account.

On appeal, appellant argues that the PERS Board erred in its interpretation of the statutory provision governing the purchase of service credit in the Prosecutors Part. Appellant also argues that if the PERS Board's interpretation is correct, this statutory provision violates his due process, equal protection, and contract rights under the United States and New Jersey Constitutions. We reject these arguments and affirm the PERS Board's final decision.

The statutory provision governing the purchase of service credit in the Prosecutors Part is N.J.S.A. 43:15A-156(a), which provides in pertinent part:

Any service credit which has been established in the Public Employees' Retirement System by a prosecutor prior to the effective date of this act shall be established in the Prosecutors part ...


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