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In re Keenan


May 13, 2010


On appeal from the Board of Trustees of the Police and Firemen's Retirement System, Department of Treasury, Docket Nos. 3-10-22451 and 3-10-35617.

Per curiam.


Argued Telephonically April 26, 2010

Before Judges Reisner and Chambers.

Dennis Keenan appeals from a December 9, 2008 final determination of the Police and Firemen's Retirement System (PFRS) Board of Trustees, requiring him to make $30,541 in payments to the PFRS pension fund in connection with his retirement. We affirm.

The background was discussed at length in our prior opinion in Hemsey and Keenan v. Board of Trustees, 393 N.J. Super. 524 (App. Div. 2007) (Keenan I), rev'd on other grounds, 198 N.J. 215 (2009), and need not be repeated in detail here.*fn1 In summary, we concluded that in 1998, the PFRS Board's staff had advised Keenan that he could retire from his PFRS-covered position as Fire Chief, and accept a position as Public Safety Director the day after his retirement, while retaining his PFRS pension. The advice was wrong, but we held that when the Board finally discovered the error in 2002, the Board was equitably estopped from requiring Keenan to re-pay $450,000 in pension benefits that he had received during the years from 1998 to 2002. Keenan I, supra, 393 N.J. Super. at 535-36. However, we held that Keenan must re-enroll in the PFRS system and make pension contributions until he retired from his new position. Id. at 537.

When Keenan retired on July 1, 2007, the Board notified him that he was required to reimburse the PFRS pension system for $30,541 in pension contributions that he should have made from 1998 to 2002. Keenan objected to the repayment requirement and also challenged the Board's calculation of the amount of his pension at $6849. The Board eventually re-calculated Keenan's pension at $7141, which was based on forty-three years of service, including the years 1998 to 2002. Before the agency, Keenan did not challenge the agency's final calculation of the pension amount. On this appeal, however, he contends that his pension should have been calculated without considering the years 1998 to 2002; he argues that pursuant to N.J.S.A. 43:15.3, the Board should have calculated the pension based on his retirement in 1998, followed by his having earned additional years of service from 2002 to 2007, when he finally retired.

Having reviewed the record, we find no abuse of discretion or other error in the Board calculating the pension as it did, or in the Board requiring Keenan to make pension contributions for the years which were included in that calculation. We affirm substantially for the reasons stated in the initial decision of Administrative Law Judge Masin, which the Board adopted in its final determination. We add the following comments.

Our decision in Keenan I was based on equitable principles, taking into account the agency's role in misleading Keenan and the financially ruinous consequences of requiring him to repay an enormous sum of money. We did not hold that the agency was bound to treat Keenan as having retired in 1998 for all conceivable future purposes. Our decision also acknowledged the importance of maintaining the actuarial integrity of the pension system. Id. at 536.

In this case, it is necessary to include the years 1998 to 2002 in order to qualify Keenan as having forty-three years of service credit, which in turn results in his being entitled to a monthly pension of $7141. Since Keenan is receiving the benefit of service credit for the 1998-2002 time period, we perceive no inequity in his being required to make pension contributions for that period. Finally, although he was not legally entitled to do so, from 1998 to 2002 Keenan earned $450,000 in public pension benefits, while also earning over $100,000 a year in public salary. We conclude that our decision in Keenan I accorded him as much equitable relief as he was entitled to, and no further equitable relief is warranted here.


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