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Point Pleasant Borough PBA Local #158 v. Borough of Point Pleasant

March 24, 2010

POINT PLEASANT BOROUGH PBA LOCAL #158, RICHARD L. FENNESSY, ROBERT J. WELLS, SR., AND LEWIS E. THOMPSON, PLAINTIFFS-APPELLANTS,
v.
BOROUGH OF POINT PLEASANT, AND BOROUGH OF POINT PLEASANT COUNCIL, DEFENDANTS-RESPONDENTS.



On appeal from Superior Court of New Jersey, Law Division, Ocean County, Docket No. L-3431-08.

The opinion of the court was delivered by: Payne, J.A.D.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

APPROVED FOR PUBLICATION

Argued December 9, 2009

Before Judges Cuff, Payne and Miniman.

This matter requires us to determine the effect of N.J.S.A. 40A:10-23, governing the discretionary payment by the employer of premiums for health benefits coverage following retirement, upon the Borough of Point Pleasant's Ordinance § 14-19, which also concerns the same subject matter, and Article X of the Collective Negotiations Agreement (CNA)*fn1 entered between the Borough of Point Pleasant and the Patrolmen and Sergeants of the Point Pleasant Borough Policemen's Benevolent Association (PBA) Local No. 158, governing payments for hospital and medical insurance.

N.J.S.A. 40A:10-23, as amended in 1995, provides in relevant part:

Retired employees shall be required to pay for the entire cost of coverage for themselves and their dependents....

The employer may, in its discretion, assume the entire cost of such and pay all of the premiums for employees... b. who have retired after 25 years or more of service credit in a State or locally administered retirement system and a period of service of up to 25 years with the employer at the time of retirement, such period of service to be determined by the employer and set forth in an ordinance or resolution as appropriate... including the premiums on their dependents, if any, under uniform conditions as the governing body of the local unit shall prescribe.

Prior to the 1995 amendment, N.J.S.A. 40A:10-23 provided:

The employer may, in its discretion, assume the entire cost of such coverage and pay all of the premiums for employees who have retired on a disability pension or after 25 years or more service with the employer, or have retired and reached the age of 62 or older with at least 15 years of service with the employer, including the premiums on their dependents, if any, under uniform conditions as the governing body of the local unit shall prescribe.

Thus, before the 1995 amendments, the "statute expressed a clear legislative intention to require twenty-five years of service with the employer in order for the employer to grant discretionary health benefits to an employee who had not reached the age of sixty-two." Middletown Twp. PBA Local 124 v. Twp. of Middletown (Middletown II), 193 N.J. 1, 13 (2007). In amending the statute, "the Legislature eliminated the requirement of 'a period of twenty-five years or more served with the employer' and replaced it with twenty-five years or more service 'credit' in a state or local retirement system, including some period with the employer at retirement." Id. at 14.

[T]he legislative history of the amendment removes doubt as to the meaning of the statute: "to broaden the categories of employees for whom a local government could choose to pay health benefits after retirement," including "employees who have aggregated sufficient service credits in one or more State or locally administered retirement systems." [Id. at 14-15 (quoting Assembly Local Gov. Comm. Statement to Assembly Bill No. 2588, L. 1995, c. 136 (Mar. 27, 1995)).

In 1994, one year prior to the passage of the amendment to N.J.S.A. 40A:23-10, the Borough of Point Pleasant enacted Ordinance ยง 14-19, governing retirement benefits, ...


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