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Marzocco v. Board of Trustees

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION


August 22, 2008

JOANN T. MARZOCCO, PETITIONER-APPELLANT,
v.
BOARD OF TRUSTEES, TEACHERS' PENSION AND ANNUITY FUND, RESPONDENT-RESPONDENT.

On appeal from the Department of the Treasury, Division of Pensions and Benefits.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION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.

I.

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 that [petitioner] received incorrect information or insufficient information when she telephoned the Division.

Additionally, in 1984, the Division was under no obligation to provide documents to [petitioner] with regard to the benefit of one program [over] another. Since the ABP and PERS are governmental plans, they are not required to follow the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). However, even under ERISA, the plan sponsor is not required to provide specific items to a program member about the benefits or disadvantages of one program over another. Materials available from the Division in 1984 would have provided information about each retirement program's eligibility requirements, program provisions and availability of benefits; these would be the same kind of information available for private retirement plans under ERISA requirements.

You also make reference to Zajack v. Division of Pensions and Benefits, [Docket No. A-6467-03, (App. Div. May 1, 2006)] and state that . . . [b]ased upon the factors discussed in Zajack, [petitioner] should be permitted to reverse her decision, void her transfer from TPAF, reactivate her account and transfer the credit for her employment at Bergen to the TPAF.

The Zajack case is not a published decision at this time. Additionally, we believe the facts and circumstances of Zajack to be specific to that case. For these reasons, we disagree with your claim that [petitioner] should be permitted to reverse her decision on the basis of the Zajack case.

After reviewing these facts, I find that [petitioner] filed a valid waiver of retirement benefits under the TPAF and PERS when electing to enroll in the ABP. [Petitioner] had available to her sufficient resources to render an informed decision concerning this election and there is no established caselaw or statutory guidance that would permit the Division to administratively revoke [her] waiver of retirement benefits under the TPAF and PERS and permit her to re-establish retirement benefits under either of those retirement systems or transfer to those retirement systems any service rendered in a position covered under the ABP pursuant to the provisions of N.J.S.A. 18A:66-170.

Therefore, your request to revoke [petitioner's] waiver of benefits under TPAF and PERS, has been denied.

As noted above, I have reviewed your written submissions including your written requests of appeal. Because this matter does not entail any disputed questions of fact, I was able to reach my findings of fact and conclusions of law in this matter on the basis of the retirement system's enabling statutes and without the need for an administrative hearing.

Accordingly, this correspondence shall constitute the Final Administrative Determination of this office.

Upon receiving that March 21, 2007 Final Administrative Determination, petitioner filed a timely appeal with this court.

On appeal, petitioner argues that the decision of the Director denying her request to transfer her pension credit from the ABP to the TPAF and reinstate her TPAF account was not supported by substantial, credible evidence and was inconsistent with applicable law. Therefore, she argues, the Director's decision should be reversed and the matter remanded for a hearing on the merits.

II.

We review petitioner's arguments in accordance with our scope of review, which requires us to affirm the agency's decision unless it was arbitrary, capricious or unreasonable, or violative of express or implied legislative policies. In re Taylor, 158 N.J. 644, 656 (1999). So long as there is substantial credible evidence to support the agency's findings, and the agency reached a conclusion that is supported by the relevant facts and consistent with legislative enactments, we will affirm the agency's decision. Ibid. A reviewing court will not substitute its judgment for that of the agency and accords a presumption of reasonableness to the agency's action, which it is the appellant's burden to overcome. Id. at 657.

As the Court observed in Taylor, "although the scope of review of an agency's decision is circumscribed, an appellate court's review of an agency decision is 'not simply a pro forma exercise in which [the court] rubberstamp[s] findings that are not reasonably supported by the evidence.'" Ibid. (quoting Chou v. Rutgers, 283 N.J. Super. 524, 539 (App. Div. 1995)). "Appellate courts must engage in a 'careful and principled consideration of the agency record and findings.'" Id. at 657-58 (quoting Mayflower Sec. Co. v. Bureau of Sec., 64 N.J. 85, 93 (1973)). Furthermore, "[a]n appellate tribunal is . . . in no way bound by the agency's interpretation of a statute or its determination of a strictly legal issue." Ibid. With these principles in mind, we turn to a review of petitioner's contentions on appeal.

III.

We turn first to petitioner's contention that the Director's Final Administrative Determination must be reversed because it was not supported by substantial and credible evidence in the record. Agency action is presumed to be valid. Burris v. Police Dep't, Twp. of W. Orange, 338 N.J. Super. 493, 496 (App. Div. 2001). "We accord to the agency's exercise of its statutorily-delegated responsibilities a strong presumption of reasonableness." Ibid. "The burden of showing the agency's action was arbitrary, unreasonable or capricious rests upon the appellant." Ibid. Applying that standard, we are satisfied that the Director's decision was based upon substantial, credible evidence in the record.

As we observed in Burris, the Division does not have the obligation of establishing that it provided specific information to petitioner, nor does it have the obligation to disprove her allegation that an unnamed Division staff member assured her in 1984 that a transfer of her retirement account into the ABP would be financially beneficial. See ibid. As we made clear in Burris, a person challenging agency action must satisfy the burden of proving that agency action was invalid. The agency is not obliged to prove the contrary. Ibid.

Thus, we have been presented with no meritorious basis upon which to question or repudiate the Director's finding that because telephone conversations are not routinely recorded, it is impossible for the agency, twenty-four years after the fact, "to address [petitioner's] claim that [she] received incorrect information or insufficient information when she telephoned the Division" in 1984. As the Director observes, had petitioner presented written questions to the Division in 1984 and requested a written response, a record would have been maintained of the information that was provided to petitioner nearly a quarter-century ago. It was petitioner's choice to discuss the transfer of her pension contributions orally with a Division staff member. Having made that decision, she cannot now be heard to complain that the evidence in the record is insubstantial to support the Director's conclusion that she has not satisfied her burden of challenging agency action.

Moreover, we have closely reviewed the documents petitioner signed in 1984. Each document she signed made it unmistakably clear that her decision to transfer her retirement contributions from one fund to the other was a final decision. As a member of a pension fund, ultimately it was her responsibility to decide how her fund should be managed. She has presented nothing, other than a reference to an unpublished opinion, to support her contention that the Division had an affirmative obligation to counsel her about the risks and benefits attendant upon her pension fund selection. Unpublished decisions have no precedential value. R. 1:36-3. Accordingly, we decline to discuss or analyze another panel's per curiam decision in Zajack. See ibid.

Each document petitioner signed advised her that by transferring her accumulated pension contributions to ABP, she waived her statutory right to transfer her retirement contributions to PERS. Petitioner has provided nothing other than her own attorney's letter to support her unsubstantiated contention that she was provided with incorrect information in 1984. Far more is required to overcome the presumption of validity that attaches to agency action. See Burris, supra, 338 N.J. Super. at 496. Accordingly, we conclude that petitioner has failed to satisfy her burden of establishing that the Director's findings of fact were unsupported by substantial and credible evidence in the record.

IV.

We turn next to petitioner's contention that the Director erred when he denied her request to transfer her funds back to TPAF. We begin that analysis by observing that even if her 1984 decision to transfer her pension contributions to the APB were to be voided, the only transfer option that she maintains is a transfer to PERS. Once an individual is no longer employed as a teacher in a secondary school, he or she is no longer permitted to maintain his or her pension contributions with the TPAF. That fund is limited to teachers of the secondary school level and below; college professors may not participate in the TPAF. N.J.S.A. 18A:66-2(p); N.J.S.A. 18A:66-2.1. Once petitioner began her employment at Bergen, she was required to transfer her accumulated deductions to either PERS or ABP. N.J.S.A. 18A:66-170.

Nothing in any of the statutes affecting pension membership permits a college-level faculty member to enroll, or remain enrolled in, TPAF. Consequently, if petitioner were to be permitted to void her transfer into ABP, she could not re-enroll in TPAF. The only option available would be PERS. As we have already concluded, however, the Director's determination that her request should be denied was based upon substantial and credible evidence in the record.

V.

Finally, we address petitioner's contention that the Director is precluded from arguing on appeal that the doctrine of laches bars petitioner's assertion of her claim. We agree with petitioner that because the Director did not rely in his March 21, 2007 Final Administrative Determination upon laches as a basis for rejecting petitioner's request to transfer her accumulated deductions out of ABP, he may not rely upon that claim on appeal. A party is not permitted to raise on appeal a ground upon which that party did not rely below. See Middle Dep't Inspection Agency v. Home Ins. Co., 154 N.J. Super. 49, 56 (App, Div. 1977), certif. denied, 76 N.J. 234 (1978).

Our conclusion that the Director is not entitled to rely upon the doctrine of laches is, however, of no moment. We have already concluded that the Director's March 21, 2007 decision is supported by substantial and credible evidence and therefore should not be disturbed.

Affirmed.


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