On appeal from the Department of the Treasury, Division of Pensions and Benefits.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted August 12, 2008
Before Judges Sapp-Peterson and Baxter.
Petitioner Joann T. Marzocco*fn1 appeals from a March 21, 2007 final agency decision of the Department of Treasury, Division of Pensions and Benefits (Division) that denied her request to void the transfer of her accumulated pension contributions from the Teachers' Pension and Annuity Fund (TPAF) to the Alternate Benefit Program (ABP). The Division also denied her request to reinstate her TPAF account with credit for prior service. We affirm.
Petitioner became employed as a teacher at Paramus High School (Paramus) in 1967 and remained employed there until the end of the 1983-84 school year, at which time she resigned in order to accept a position as an assistant professor at Bergen Community College (Bergen). While she was employed at Paramus, petitioner was a member of the TPAF. On August 30, 1984, immediately before she began her employment at Bergen, she filed an application with TPAF to withdraw her pension contributions from that fund and transfer them into the ABP.*fn2 That transfer became effective on September 1, 1984.
On the same date, August 30, 1984, petitioner signed a document entitled "Election of Retirement Coverage," in which she signed her name below the statement that read, "I wish to participate in the Alternate Benefit Program and waive my statutory right to remain in or transfer to the Public Employees' Retirement System."*fn3 Based upon the two documents petitioner signed on August 30, 1984, her enrollment into the ABP became effective on September 1, 1984, the same day she began her employment as an assistant professor at Bergen Community College. She selected the Teachers' Insurance and Annuity Association - College Retirement Equities Fund (TIAACREF) as her investment provider. TIAA-CREF has been directly managing her account ever since 1984.
As we understand the record, the principal difference between PERS and the ABP is that a state employee enrolled in PERS is guaranteed a fixed monthly retirement allowance based upon a statutory formula. N.J.S.A. 18A:66-44. In contrast, a member of the ABP bears the investment risk for his or her personal account. Such account consists of the employee's and the employer's contributions, which the employee invests in a fund of his or her choosing. Ultimately, the ABP member's monthly retirement allowance is based upon the performance of the private investment fund he or she has selected, so that if the fund performs well, the employee's pension fund increases in value, but if the fund performs poorly, the employee's pension fund shrinks. In the latter circumstance, if the investment fund performs poorly, the employee's monthly retirement allowance is likely to be considerably less than he or she would have earned had such employee remained a member of PERS where the monthly retirement allowance is fixed.
Although no details are provided in the record, petitioner states in her brief that her decision to transfer into the ABP fund resulted in "disastrous financial consequences." By letter dated September 26, 2006, more than two decades after she transferred into the ABP, her attorney sent a written request to the Secretary of the Board of Trustees of TPAF asking TPAF to void petitioner's 1984 transfer from TPAF to ABP and reinstate her TPAF pension account with credit for her twenty-six years of service credit at Bergen. On her behalf, her attorney asserted that petitioner was entitled to void her selection of ABP because she "received incorrect and inadequate information regarding the financial consequences of her transfer decision at the time that she was compelled to make the decision." He further argued that:
[N]either the College nor the Division of Pension and Benefits provided her with any information to enable her to make an informed decision. Simultaneously, [petitioner] telephoned the Division and was advised that she would financially benefit from transferring all of her credit in the [TPAF] to the [ABP]. However, no substantiation was provided, nor did the Division or the [ABP] provide or send any information to [petitioner] explaining which program would be more beneficial for her and why it would be more beneficial.
By letter of October 12, 2006, Sandra Horan, the Chief of the Enrollment and Purchase Bureau of the Division, denied petitioner's request to reinstate her TPAF account. Horan reasoned, "[petitioner] was fully aware that she was waiving her statutory right to transfer to PERS on August 30, 1984." Petitioner appealed the October 12, 2006 denial to the Director of the Division (Director), who on March 21, 2007, issued the Final Administrative Determination that is the subject of this appeal. In his decision, the Director observed that the documents petitioner signed in August 1984 specified that by signing the documents, she waived her future right to benefits under the TPAF.
The Director also noted that the applicable statute, N.J.S.A. 18A:66-170, which has not been amended significantly since 1984, specifies that any person who transfers his or her membership in TPAF to the ABP waives all rights to benefits "which would otherwise be provided by PERS." The Director also responded to petitioner's attorney's September 26, 2006 letter and rejected her claims. The Director wrote:
A review of [petitioner's] membership file does not show a record of any communication from [petitioner] requesting this information nor does it show a record of the information given to [her]; it has not been the practice of the Division to retain a record of telephone conversations, but a record would have been maintained if such requests were made and responded to in writing. Therefore, we are not able to address your claim ...