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Sussex County Community College v. Division of Pensions and Benefits

October 6, 2008


On appeal from the Final Administrative Decision of the Division of Pension and Benefits.

Per curiam.


Submitted October 15, 2007

Before Judges Collester and C.S. Fisher.

Sussex County Community College (College) appeals from the final determination of the Department of Pensions and Benefits (Division) denying certain College employees the right to purchase credits from the Public Employees Retirement System (PERS) for prior service as part-time State employees and apply those credits to the New Jersey Alternative Benefit Program (ABP), the retirement program for full-time eligible employees of public institutions of higher learning. We reverse.

The following facts are undisputed. Heidi Gregg was hired by the College as a part-time athletic department assistant on September 12, 1989. As such she was both eligible for enrollment in PERS and required by statute to be enrolled.

N.J.S.A. 43:15A-7. The responsibility for her enrollment fell upon the College as her employer. However, she was not so enrolled due to the College's error.

On August 17, 1992 Ms. Gregg was hired by the College as a full-time athletic department assistant. As a full-time employee, she was required to participate in the ABP pursuant to N.J.S.A. 18A:66-170, and was directly enrolled. In early 1995, Ms. Gregg approached the College to obtain pension credits for her prior part-time service and to buy back service for other prior employment with local public school districts between 1971 and 1989. It was then that the College realized that it had failed to enroll Ms. Gregg in PERS when she was first employed on a part-time basis in 1989. An official of the College inquired of the enrollment section of the Division and was told that the College should forward a completed PERS enrollment form. After submitting the information on behalf of Ms. Gregg, the College discovered that there were fifteen to twenty other current full-time employees who also had not been enrolled in PERS while they worked in part-time or adjunct positions. The College wrote to Joseph Zisa, Manager of Fiscal Resources of the Division, on February 28, 2005, requesting that Ms. Gregg be allowed to purchase credit for her prior part-time service. The inquiry was referred to Sandra Horan, Chief of the Enrollment and Purchase Bureau. She responded on May 15, denying the request for Ms. Gregg to purchase prior service credits on grounds that she was a member of the ABP, which did not permit purchase of prior service credits, and that she could not be retroactively enrolled in PERS.

Over a year later, on May 30, 2006, the president of the Sussex County Faculty Federation-AFT Local 4780, wrote to the Board of Trustees of the Division of Pensions and Benefits that it had come to the attention of the Federation that some fifteen to twenty full-time faculty members of the College were denied the right to enroll in PERS during their earlier status as adjunct or part-time instructors because of errors occurring under the previous administration. The letter urged the Division to correct the situation. A few days later, the College president wrote and enclosed a resolution of the Board of Trustees requesting assistance for current employees who were not properly enrolled in PERS during their part-time or adjunct employment due to the College error. Specifically, it was requested that they be retroactively enrolled in PERS and permitted to purchase service credits that would be transferred into the ABP. The resolution stated:

[T]he . . . College considers it a priority to offer all such affected employees an equitable resolution to this situation, and the Board is willing to assume the financial cost imposed by the New Jersey Division of Pensions to implement a resolution directed through the Public Employees Retirement System and the Alternate Benefit Program.

On November 3, 2006 the Division director issued the final agency decision denying the College's request, stating,

[I]n summary, the service your employees wish to purchase was eligible service under PERS that was never established under PERS prior to their enrollment in the ABP. And since they are not members of the PERS, they are not granted the right to purchase credits for the service in question in the PERS.

We are not bound by this interpretation by the Division director. Harris v. Board of Trustees of the Public Employees Retirement System, 378 N.J. Super. 459, 464 (App. Div. 2005). It is undisputed that enrollment in PERS is compulsory for part-time faculty who meet the eligibility requirements set forth in the regulations, N.J.A.C. 17:2-2.6, and the primary obligation of enrollment falls upon the employer. Bahrle v. Mirabelli, 107 N.J. Super. 361, 364 (Law Div. 1969). Had Ms. Gregg and the other affected employees been enrolled and continued in PERS, there is no question that they could purchase service credit. The State argues that this option was foreclosed because of their subsequent full-time employment requiring their participation in the ABP which did not permit them to purchase credit in PERS.

Simple fairness requires that Ms. Gregg and the others be permitted to do that which ought to have been done but for the inadvertent inaction of College officials. We have previously held that an employee does not waive his or her right to enrollment in PERS when there is no proof that the employee was aware that they were not properly enrolled by their employer. See Gladden v. Bd. of Trustees of the Public Employees Retirement System, 171 N.J. Super. 363, 371 (App. Div. 1979). We have also held that where failure to enroll an eligible employee in PERS is attributable to the employer, PERS must permit the employee to be retroactively enrolled. See Chapel v. Bd. of Tr. of the PERS Div. of Pensions, 258 N.J. Super. 389, 391 (App. Div. 1992); Gladden, supra, 171 N.J. Super. at 371-72; City of Union City and Cmty. Dev. Agency v. Bd. of Tr. of the PERS Div. of Pensions, 93 N.J.A.R. 2d (TYP) ...

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