On appeal from the Board of Trustees of the Teachers' Pension and Annuity Fund, Department of Treasury.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges Sapp-Peterson and Messano.
Petitioner, Howard A. Reed, a former teacher, is six months short of the ten-year service credit needed to collect an ordinary disability retirement pension from respondent, the Teachers' Pension and Annuity Fund (TPAF). He appeals a final administrative determination by the Board of Trustees, Teachers' Pension and Annuity Fund (Board), denying his request to receive pension credit for periods of employment with the Paterson Board of Education (Paterson) from December 1988 to March 1989 and from June 1990 to April 1991. We reverse.
Reed commenced employment with Paterson as a school teacher on August 18, 1978, and, effective September 1, 1978, he became a member of TPAF under account #347109. In February 1982, Reed injured his knee during the course of a basketball instruction. As a result of the injury, Reed underwent surgery to reconstruct torn ligaments. He later developed a bacterial infection and other complications that necessitated additional surgery, ultimately resulting in a total knee replacement. While Reed was under treatment, he received his full salary for one year following the accident. From April 1, 1983 through October 31, 1985, Reed received temporary disability benefits on which Paterson paid pension contributions.*fn1 Reed never resumed employment with Paterson. As of October 31, 1985, Reed had been a member of TPAF for seven years and four months.
On September 1, 1986, Reed accepted part-time employment with the Hawthorne Board of Education (Hawthorne) and continued his membership in TPAF under his original account #347109. Reed resigned from his position with the Hawthorne School District on June 30, 1988. By that time, Reed had been a member of TPAF under account #347109 for eight years and eleven months. In December of that same year, Reed reopened his workers' compensation claim for the injury he sustained while employed with Paterson and received benefits from December 1988 to March 1989 and from June 1990 to April 1991.*fn2
On July 20, 1990, TPAF forwarded to Reed a "MEMBER'S EXPIRATION NOTICE" for membership #347109. The notice advised Reed that his account in TPAF "will EXPIRE September 30, 1990 unless you return to public service in New Jersey." Reed did not return to public service until April 8, 1991, when he accepted a position as a teacher with the Elizabeth Board of Education (Elizabeth). Reed enrolled in TPAF as a new member under a new membership #427347 because his previous membership #347109 had expired. Reed resigned from his position with Elizabeth on September 1, 1992, and accepted a position as a head football coach for a high school located in Delaware.*fn3
At the time of his resignation, Reed had been a member of TPAF under his membership #427347 for seventeen months.
As early as November 1985, Reed began to ask questions about his pension account. In a letter dated October 15, 1991, Reed wrote to the Department of Treasury, Division of Pensions (Pensions), expressing his understanding that "during the times I was out of work and receiving compensation[,] that during these times the Paterson Board of Education should have been contributing to my pension fund." Pensions responded to Reed's letter in correspondence dated December 23, 1991. The letter confirmed Reed's entitlement to pension contributions from Paterson on his behalf if Reed was "receiving periodic workers' compensation benefits instead of regular salary payments" and stated that if this information was confirmed, Paterson would be billed for those periods in which it did not make the requisite payments. The letter advised Reed that as of December 23, 1991, he had been credited with "81 months, or 6 years and 9 monhts, of service credit under your original retirement account (TPAF #347109)." The letter also advised Reed that the eighty-one months of service credit did not include any additional time to which Reed may have been entitled that was the subject of Pensions' inquiry to Paterson. In addition, the letter explained why Reed was assigned a new pension number when he commenced employment with Elizabeth:
Upon your return to employment with Elizabeth Board of Education you were assigned a new retirement account (TPAF #427347). The new account was established because your original account remained inactive since June 1988. New Jersey Pension regulations call for an account that remains inactive for more than two years to be closed unless the member received at least ten years of service credit prior to the inactivity. Therefore, unless you are eligible for at least an additional 3 years and 3 months of service credit for the period you claim to be on workers' compensation, you will be forced to withdraw your contributions to the original retirement account. You may then be eligible to purchase this prior service credit under your current retirement account. But, we will have to wait until the matter of your workers' compensation claim is resolved.
The question of Paterson's pension contributions was not resolved at that time, and letters continued to go back and forth between Reed, and later his attorney, and Pensions and Paterson. On February 2, 1993, Pensions notified Paterson of a shortfall in Reed's pension account under #347109 and directed Paterson to remit a $1,908.38 payment to Pensions on Reed's behalf. In a letter dated February 22, 1993, Reed continued to claim that because he was paid wages by the Paterson workers' compensation administrator for the periods December 14, 1988 through February 21, 1989 and March 27, 1990 through April 7, 1991, he was entitled to pension contributions from Paterson for those periods as well. He claimed further that had Paterson done so, his TPAF membership #347109 would not have been converted because he would have acquired the requisite ten-year period of service necessary to preserve his membership rights, benefits and privileges in the retirement system.
On August 10, 1994, Pensions sent Reed a letter in response to correspondence it had received from him about the status of Paterson's pension contributions on his behalf.*fn4 In this letter, Pensions advised Reed,
This is in response to your most recent letter concerning the status of your contributions due in your behalf from Paterson Board of Education.
On July 25, 1994 I spoke on the phone simultaneously with Mr. Frank Pepe, Secretary of the Board of Education[,] and Linden Smith of Paterson's Risk Management. Mr. Pepe was very concerned with fulfilling Paterson's obligation to pay your contribution from April 1, ...