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Parkin v. Board of Trustees

May 14, 2009

HARRY G. PARKIN, APPELLANT,
v.
BOARD OF TRUSTEES, PUBLIC EMPLOYEES RETIREMENT SYSTEM, RESPONDENT.



On appeal from the Final Decision of the Board of Trustees of the New Jersey Public Retirement System, No. 2-10-196008.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Submitted February 11, 2009

Before Judges Parrillo and Messano.

Appellant Harry G. Parkin appeals from the final agency decision of the Board of Trustees of the Public Employee Retirement System (the Board) resulting in partial forfeiture of his service and salary credits. He contends that the Board failed to follow its own regulations governing partial forfeiture of pension benefits, and further contends that the Board "adopted a rule regarding the partial termination of pension benefits without going through the regulatory process."

We have considered these arguments in light of the record and applicable legal standards. We affirm.

The essential facts are undisputed. With the exception of a four-year break in service, from 1972 to January 1, 2004, Parkin was continuously employed in various public positions until he retired as Mercer County Chief of Staff. Based upon his veteran's status, his service time, and additional credit he received as part of an early retirement incentive program, he had accumulated twenty-eight years and nine months of service credit equating to a monthly pension of $5864.49.

On March 11, 2004, Parkin was indicted by a Federal grand jury and charged with having participated in a wide-ranging, corrupt scheme utilizing his office as Chief of Staff to defraud Mercer County and its citizens. The indictment alleged numerous acts Parkin committed in furtherance of the plan while employed as Chief of Staff. After a jury trial, in March 2005, he was convicted of all charges. In August 2005, he was sentenced to a period of ninety months imprisonment.

The Board considered Parkin's continued entitlement to pension benefits at its September 2005 meeting. Applying the factors set forth in N.J.S.A. 43:1-3(c), the Board determined a partial forfeiture was warranted for the period of time Parkin served as Chief of Staff, i.e., from June 1, 1994, to the date of his retirement. As a result, Parkin became ineligible for veteran retirement status and additionally lost early retirement incentive benefits. His monthly pension amount was significantly reduced and he no longer qualified for lifetime medical benefits.

On appeal to the Office of Administrative Law, Parkin argued that the Board had arbitrarily chosen the forfeiture period to run from his first day as Chief of Staff, rather than the time his misconduct allegedly first occurred, i.e., in September 2000. The administrative law judge (ALJ) initially recommended the Board supplement the record regarding its selection of the date upon which to commence the forfeiture period. In September, 2007, the Board filed a supplementary statement of its reasons for selecting the initial date of Parkin's employment as Chief of Staff as the operative date of forfeiture, relying heavily upon the statements made by the sentencing judge in which he outlined the nature and extent of Parkin's criminal conduct. The ALJ issued his initial decision in November 2007 ordering forfeiture of all of Parkin's service from the date he became Chief of Staff; the Board adopted the ALJ's recommendations and this appeal ensued.

Before considering Parkin's specific arguments, we set forth the statutory and regulatory framework in which they are raised. N.J.S.A. 43:1-3 provides in relevant part:

a. The receipt of a public pension or retirement benefit is hereby expressly conditioned upon the rendering of honorable service by a public officer or employee.

b. The board of trustees . . . is authorized to order the forfeiture of all or part of the earned service credit or pension or retirement benefit of any member of the fund or system for misconduct occurring during the member's public service which renders the member's service or part thereof dishonorable . . . .

c. In evaluating a member's misconduct to determine whether it constitutes a breach of the condition that public service be honorable and whether forfeiture or partial forfeiture of earned service credit or earned pension or retirement benefits is appropriate, the board of trustees shall consider and balance ...


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