On appeal from the Board of Trustees, Public Employees' Retirement System, Docket No. 2-10-218657.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges Payne and Koblitz.
Marc Chiappini, the recipient of a Public Employees' Retirement System (PERS) pension effective February 1, 2007, appeals from a final determination of the PERS Board of Trustees that his retirement was not bona fide because he did not observe the required thirty-day break in service before commencing a PERS-covered part-time temporary teaching position with the Cumberland County College (CCC), where he remained employed under three conditional semester-long contracts from January 22, 2007 through May 31, 2008. As a consequence, the PERS Board ordered Chiappini to repay all pension benefits paid in error through June 1, 2008 and to make pension contributions from February 2007 through May 2008. A repayment of $32,479.95 was thus required. Additionally, Chiappini's life insurance, which was based on his earnings, was reduced from $12,875 to $1,000. Chiappini earned a total of $8,775 for three semesters of teaching at CCC.
Chiappini commenced employment with the Juvenile Justice Commission (JJC) as a teacher on July 5, 1983. He filed for early retirement on July 20, 2006. At its monthly meeting of August 16, 2006, the PERS Board approved Chiappini's application. Its letter to Chiappini informing him of the approval stated:
In accordance with law, you have until thirty days after (A) the effective date of your retirement, or (B) the date your retirement was approved by the Board of Trustees, whichever is the later date, to make any changes to your retirement. Also, your first check cannot be mailed until after this thirty day period. However, the benefit will be retroactive to the original effective date of your retirement. . . .
You should expect to be reenrolled in the PERS if you accept employment after retirement with the State or any of the local participating public employers in a PERS covered position and your total salary from all public employment exceeds $15,000 in a calendar year.
If you return to public employment following your retirement, you must notify our Office of Client Services immediately at (609) 292-7524.
On September 27, 2006, Chiappini filed an application to amend his retirement date from January 1, 2007 to February 1, 2007. On December 20, 2006, the Board approved the change, sending a confirmatory letter that contained the same language as we have just quoted.
On November 16, 2006, Chiappini signed a conditional contract to teach a four-credit course in plant science and a lab for CCC, a contract that was later revised to add responsibility to teach a three-credit course in earth science. The total compensation was $4275. Evidence suggests that Chiappini was "begged" to take the position when the school's regular adjunct professor required a medical leave and a full-time faculty member left the institution. Chiappini subsequently signed conditional part-time temporary teaching contracts for the following two semesters. He was not hired thereafter, because the prior adjunct professor returned. Prior to signing the first contract, Chiappini asked Kim Somers, a member of the CCC's Human Resources Department, whether acceptance of the teaching position would affect his pension, and he was assured that it would not. Somers allegedly informed him that he was ineligible for re-enrollment in the PERS. She also informed him that CCC frequently hires former PERS employees, and there has never been a problem with their pensions.
On February 7, 2008, CCC submitted a PERS pension enrollment application on behalf of Chiappini, certifying that he began employment with the college on January 22, 2007. On June 18, 2008, Virginia Martucci, Chief of the Operations Bureau, Division of Pensions and Benefits, wrote to Chiappini informing him that because he began working for CCC on January 22, 2007, his February 1, 2007 retirement was not considered "bona-fide." The letter stated that "[y]ou must have at least a 30-day break in service after your retirement date to be considered retired from the PERS. If you return to PERS covered employment within 30 days of your retirement date, your retirement is not valid, and you are considered an active employee." The Division then requested Chiappini to "make reimbursement for checks dated March 1, 2007 through June 1, 2008 in the amount of $32,479.95." On June 23, 2008, after speaking with Chiappini, Martucci informed Chiappini by letter that his retirement benefits were temporarily reinstated pending resolution of the retirement issue.
At its regular monthly meeting of August 20, 2008, the Board voted to postpone action on Chiappini's case until it obtained additional information from CCC, notably CCC's employment contracts with Chiappini for the Spring 2007, Fall 2007, and Spring 2008 semesters. At its September 18, 2008 meeting, the Board determined that Chiappini's February 1, 2007 retirement was not bona fide because Chiappini "failed to terminate all PERS-covered employment, in accordance with N.J.A.C. 17:2-2.2, N.J.A.C. 17:2-6.1(a) and N.J.A.C. 17:2-2.6(a)."
N.J.A.C. 17:2-2.2(a) states, "[a]ny employee who has enrolled in a covered position must also enroll in any other position regardless of the employee's employment status in such position if the employee meets the salary and Social Security qualifications for enrollment." N.J.A.C. 17:2-6.1(a) states, in pertinent part, "[m]embers enrolled at multiple PERS locations must retire from employment in all covered positions before a retirement shall become effective." N.J.A.C. 17:2-2.6(a) concerns the enrollment eligibility for professors and instructors, and it states that those employed on a temporary, provisional, or adjunct basis . . . who are not in regularly appointed teaching or administrative staff positions . . . shall be eligible for enrollment if they:
(1) Earned more than the minimum threshold salary [$1,500];
(2) Worked for the entire normal school year; and
(3) have their services renewed for the succeeding school year.
The Board noted that on November 16, 2006, Chiappini signed an appointment letter confirming that he would teach a class at CCC beginning on January 22, 2007. Because employment with CCC began prior to his February 1, 2007 retirement, Chiappini was "still an active PERS employee and should have been enrolled through CCC as a multiple member of the PERS." The Board then determined that Chiappini would be enrolled retroactively from February 1, 2007 through May 31, 2008; that Chiappini must repay all retirement benefits that he received during that period; that Chiappini and CCC were ...