July 22, 2011
IN THE MATTER OF LORI LOWENSTEIN-MASE.
On appeal from the Board of Trustees, Teachers' Pension and Annuity Fund, No. 1-10-130132.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted March 1, 2011
Before Judges Carchman and Graves.
Lori Lowenstein-Mase appeals from a final administrative decision of the Board of Trustees of the Teachers' Pension and Annuity Fund (the TPAF Board), denying her request to require the Division of Pensions and Benefits (the Division) to use a higher base salary to calculate her early retirement benefits than the figures certified by her former employer, the Elizabeth Board of Education (BOE). Lowenstein-Mase argues on appeal that the TPAF Board erred when it concluded that the Elizabeth BOE "was solely responsible for determining [her] base salary for pension purposes." For the reasons that follow, we affirm.
In March 1989, the Elizabeth BOE hired Lowenstein-Mase as a "Teacher-Learning/Language Disabilities," and she contemporaneously established membership in the TPAF. She remained in the Elizabeth school system until she pled guilty to third-degree identity theft and third-degree theft by deception on May 7, 2008, and was deemed to have forfeited her employment pursuant to N.J.S.A. 2C:51-2.
Lowenstein-Mase submitted an application for retirement benefits on May 12, 2008.*fn1 However, when the TPAF Board processed the application it discovered that the "salary and pension contributions reported to the Division were overstated." According to counsel for the Elizabeth BOE, Karen A. Murray, the overstatements were the result of Lowenstein-Mase improperly receiving credit, beginning in 2000, "for 4 additional steps" on BOE's salary guide. On April 28, 2009, Murray wrote to the Division and counsel for Lowenstein-Mase, Gail Oxfeld Kanef (Oxfeld Kanef), and explained that "[t]here [was] no legal and/or contractual justification for Ms. Lowenstein-Mase to have received these 4 steps as she had no prior experience." A chart outlining what each subsequent year's correct base salary should have been was attached to the letter. Oxfeld Kanef responded on May 5, 2009, claiming that her client had "prior experience when she came to the Elizabeth District" and was entitled to the credit for the four additional steps.
Murray sent a memorandum containing "additional information regarding Ms. Lowenstein-Mase" to the Division on May 14, 2009. Included was a copy of the application for employment with the Elizabeth Public Schools that Lowenstein-Mase had filled out in February 1989. Under Section V., "Teaching Experience," she indicated that her most recent employment was "Substitute (9-12) (All subjects)" with the Asbury Park High School. Murray informed the Division, however, that substitute service did "not count for creditable service on a salary guide."
On May 18, 2009, the matter was referred to the Division's Audit Section "for an administrative review," and a representative from Audit Section sent Oxfeld Kanef the following e-mail:
The information that we use to update the accounts of members' of the respective retirement systems and pay their respective benefits is derived from the employer. It is the employer's responsibility to certify the members' base salaries at retirement. Based on the information we have at this time, it is likely that [the] base salary that we will use for your client will be based on the salary guide without the 4 additional steps. It is the position of the Elizabeth Board of Education that your client was a substitute teacher with the Asbury Park Board of Education and that substitute teaching cannot be used to earn credit on the Elizabeth Board of Education salary guide.
The TPAF Board met on June 4, 2009, and determined: "Ms. Lowenstein-Mase's retirement benefit will be based upon the salary information provided by the Elizabeth BOE as the Division is required to rely on the salary information which is provided by the employer. If this remains a disputed issue, it is a matter between the Elizabeth BOE and Ms. Lowenstein." Oxfeld Kanef was informed of the decision in a letter dated June 9, 2009. In a responsive letter dated July 7, 2009, Oxfeld Kanef stated the matter must be reconsidered because "[i]t is clear that the Elizabeth [BOE] has not and will not calculate the correct salary."
Murray again wrote to the Division on August 27, 2009. She reiterated that salary credit had never been granted "for part- time or substitute service," and "that the four (4) steps were approved in error and as a public entity, [the BOE is] required by the State to verify and recoup the erroneous expenditure of further funds."
In a "Final Administrative Determination" dated October 2, 2009, the TPAF Board rejected Lowenstein-Mase's position: In your appeal, you indicate that the Division, not the Elizabeth BOE must determine the appropriate salary. However, the Board disagrees. Pursuant to N.J.A.C. 17:3-1A.1, an employee's base salary is determined by the employer. Further, in accordance with N.J.A.C. 17:3-1.5, the Division is required to rely on information which is submitted by the employer. Therefore, it is the salary information that was provided by the Elizabeth BOE that the Division must rely upon to calculate Ms. Lowenstein-Mase's early retirement benefits. As stated previously, this is a disputed matter between the Elizabeth BOE and Ms. Lowenstein-Mase. Also, the TPAF Board has determined that there is no basis to challenge the salary information which Elizabeth BOE has submitted regarding Ms. Lowenstein-Mase['s] salary. However, in the future, if the salary dispute between your client and the Elizabeth BOE is resolved in favor of Ms. Lowenstein-Mase, please provide the information for review and adjustment by the Division.
"The scope of our review of a final agency decision is limited." Thurber v. City of Burlington, 191 N.J. 487, 501 (2007). A reviewing court will "not ordinarily overturn such a decision 'in the absence of a showing that it was arbitrary, capricious or unreasonable, or that it lacked fair support in the evidence.'" Ibid. (quoting Campbell v. Dep't of Civil Serv., 39 N.J. 556, 562 (1963)). However, a reviewing court is "'in no way bound by the agency's interpretation of a statute or its determination of a strictly legal issue.'" In re Carter, 191 N.J. 474, 483 (2007) (quoting Mayflower Sec. Co. v. Bureau of Sec., 64 N.J. 85, 93 (1973)).
Under the TPAF statutory scheme, an employer is charged with numerous duties:
Upon the employment of a person to whom this article may apply, his employer shall inform him of his duties and obligations under this article as a condition of his employment; the employer shall notify the retirement system of such appointment within 10 days thereafter; it shall keep such records and from time to time furnish such information as the retirement system may require; deduct the proportion of salary and extra salary deductions as certified by the retirement system, transfer each of the amounts so deducted to the retirement system; and shall transmit to the retirement system monthly or at such intervals as the system designates a detailed statement of all amounts so paid.
[N.J.S.A. 18A:66-32 (emphasis added).] N.J.A.C. 17:3-1.5 lists the specific person responsible for carrying out the obligations in N.J.S.A. 18A:66-32:
(a) The secretary of each local board of education shall be the certifying officer for the respective school district.
(b) The secretary, as the certifying officer, shall be responsible for the duties described by N.J.S.A. 18A:66-32 and all other duties relating to matters concerning the [TPAF].
(d) Upon request of the [TPAF] Board, the certifying officer shall be required to sign a statement, verifying that any information reported is accurate to the best of the officer's knowledge, and conforms with the statutes and rules governing the Fund.
Moreover, "Base salary" is defined as follows:
[T]he annual compensation of a member, in accordance with contracts, ordinances, resolutions, or other established salary policies of the member's employer for all employees in the same position, or all employees covered by the same collective bargaining agreement, which is reported in regular, periodic installments in accordance with the payroll cycle of the employer.
[N.J.A.C. 17:3-1A.1 (emphasis added).] Based on our independent review of the statutory and regulatory language, we agree that the Elizabeth BOE--not the Division--is the entity responsible for calculating Lowenstein- Mase's base salary. Moreover, as noted by the TPAF Board on June 9, 2009, as well as October 2, 2009, any dispute regarding salary information "is a matter between the Elizabeth BOE and Ms. Lowenstein-Mase."