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Francis Chiarello v. Board of Trustees

December 20, 2012

FRANCIS CHIARELLO, APPELLANT,
v.
BOARD OF TRUSTEES, PUBLIC EMPLOYEES RETIREMENT SYSTEM, RESPONDENT.



On appeal from the Department of Treasury, Division of Pensions and Benefits, PERS #917412.

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

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

APPROVED FOR PUBLICATION

Argued September 19, 2012

Before Judges Fisher, Waugh and St. John.

The opinion of the court was delivered by FISHER, P.J.A.D.

In February 2011, appellant Francis Chiarello, a multiple member of the Public Employees' Retirement System (PERS), applied for an ordinary disability retirement from his position with the South Jersey Transportation Authority (SJTA) with the intention to remain in his other PERS position as mayor of Buena Vista Township. N.J.S.A. 43:15A-47.2 (Section 47.2), which ostensibly permitted a public employee to retire from one public employment position while retaining an elected office and the compensation afforded by that office,*fn1 was repealed by L. 2011, c. 78, § 34(d) (Chapter 78), four months after Chiarello submitted his application. In Chiarello's appeal of the PERS Board's determination that he was required to retire as mayor to obtain an ordinary disability retirement, we examine, among other things, whether a retirement application should be governed by the law existing at the time the retirement application is submitted or at the time the application is ruled upon.

The record demonstrates that Chiarello submitted his ordinary disability retirement application on February 16, 2011, seeking to retire from his SJTA position as of March 1, 2011.

The application date was changed at that time, at the suggestion of a representative of the Division of Pensions and Benefits, to August 1, 2011. A few weeks later, the Division advised N.J.A.C. 17:2-6.1 required that, as a multiple PERS member, Chiarello "retire from employment in all covered positions" and that he be totally and permanently disabled from all job-related duties. Chiarello immediately responded that Section 47.2 permitted retention of his elected office notwithstanding his retirement from the SJTA. The PERS Board informed Chiarello it would consider his retirement application at its June 15, 2011 meeting. At that meeting, the Board decided not to process the application without Chiarello's retirement from his elected position.

Chiarello appealed, and the matter was referred to the Office of Administrative Law. After retaining counsel, however, Chiarello sought the PERS Board's reconsideration of its June 2011 decision, asserting, among other things, that Section 47.2 allowed Chiarello to retain his elected position while collecting a disability pension. The PERS Board considered this at its August 17, 2011 meeting and reaffirmed its prior denial of the application in its existing form. A final agency decision was issued on September 22, 2011, expressing the Board's view that: (1) N.J.S.A. 43:15A-42, which governs ordinary disability retirements, and N.J.A.C. 17:2-6.1, which provides guidelines for retirement applications, require that multiple PERS members terminate all such positions to be eligible to retire on an ordinary disability pension; (2) Chiarello's continued employment as Buena Vista mayor belied his claim that he was totally and permanently disabled from performing his duties with the SJTA; and (3) the Legislature, in the interim, by way of Chapter 78, repealed the part of Section 47.2 upon which Chiarello claimed his entitlement to remain Buena Vista mayor.

Chiarello filed this appeal, arguing:

I. THERE WAS NO STATUTORY BASIS FOR REFUSAL BY THE PERS TO PROCESS CHIARELLO'S APPLICATION FOR RETIREMENT BECAUSE AT THE TIME OF THE FILING OF HIS APPLICATION N.J.S.A. 43:15A-47.2 HAD NOT YET BEEN REPEALED.

II. CHIARELLO'S APPLICATION FOR ORDINARY DISABILITY RETIREMENT MUST BE PROCESSED BECAUSE THE REPEAL OF N.J.S.A. 43:15A-47.2 CANNOT BE APPLIED RETROACTIVELY TO AN APPLICATION FILED PRIOR TO ITS EFFECTIVE DATE.

We agree that Chiarello's retirement application should have been governed by the law existing at the time of its submission. Chiarello submitted his application prior to Section 47.2's repeal with the intent that his retirement would also occur before the repeal. It was only at the Division's suggestion that Chiarello's target retirement date was altered to a date beyond the repeal's effective date.*fn2 Simple fairness -- let alone the well-established principle that "favors prospective application of statutes," Gibbons v. Gibbons, 86 N.J. 515, 521 (1981); see also Landgraf v. USI Film Prods., 511 U.S. 244, 266, 114 S. Ct. 1483, 1497, 128 L. Ed. 2d 229, 253 (1994); Cruz v. Central Jersey Landscaping, Inc., 195 N.J. ...


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