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Bernards Township v. Board of Trustees of Police and Firemen's Retirement System

Superior Court of New Jersey, Appellate Division

May 24, 2013

BERNARDS TOWNSHIP, Petitioner-Appellant,
v.
BOARD OF TRUSTEES OF THE POLICE AND FIREMEN'S RETIREMENT SYSTEM, Respondent-Respondent.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued May 15, 2013

On appeal from Board of Trustees of the Police and Firemen's Retirement System, Department of Treasury, Docket No. PFRS 3-10-038016.

John P. Belardo argued the cause for appellant (McElroy, Deutsch, Mulvaney & Carpenter, L.L.P., attorneys; Mr. Belardo, on the brief).

Danielle P. Schimmel, Deputy Attorney General, argued the cause for respondent (Jeffrey S. Chiesa, Attorney General, attorney; Lewis A. Scheindlin, Assistant Attorney General, of counsel; Ms. Schimmel, on the brief).

Before Axelrad, Sapp-Peterson and Haas, Judges.

PER CURIAM

Appellant Bernards Township appeals from the June 19, 2012 decision of the Board of Trustees of the Police and Firemen's Retirement System (Board), which found the Township had provided an unauthorized early retirement incentive (ERI) to its police chief, Dennis Mott. Because the Board's June 19 decision is not final as to all the issues in dispute between the parties, we dismiss this appeal as interlocutory.

The following facts are pertinent to our review. In 1986, the Township hired Mott as a police officer. It appointed him to the position of police chief in January 2007. Soon thereafter, the Township decided it had made a mistake and, in late 2008, it determined to remove Mott from his position on charges of "incompetency, inefficiency and insubordination." The charges, however, were held in abeyance and settlement discussions were held between the Township and Mott.

Mott had accrued almost twenty-three years in municipal service by December 2008. He had previously served in the military. If he purchased twenty-six months of his military service, he would be able to retire from his police officer's position with twenty-five years of service. If this occurred, Mott would be "able to achieve a 'special retirement' benefit, allowing him to collect a pension of sixty-five percent of his salary, rather than a service retirement, which would have entitled him to a fifty percent pension." In order to persuade Mott to retire, rather than contest the proposed disciplinary charges, the Township offered to pay Mott $61, 301, the cost of purchasing twenty-six months of his military service. Mott quickly accepted and, using the funds given to him by the Township, he purchased his military service.

Mott filed an application for retirement with the Board in January 2009. On January 12, 2009, the Division of Pension and Benefits asked the Township to provide details of the settlement and the Township promptly did so. On March 9, 2009, the Division approved Mott's retirement application.

On April 21, 2009, the Division sent a letter to the Township advising it that the Division had determined the settlement with Mott constituted

an unauthorized [ERI], the prohibition of which has been confirmed by the N.J. State Supreme Court as set forth in Fair Lawn Ed. Assn. v. Fair Lawn Bd. of Education, 79 N.J. 574 (1979), in which the [Court] held invalid an early retirement plan because it posed a potential for financial harm to the State administered retirement system and was not authorized by State Law.

The Division determined that "[t]he present value of the additional pension liability associated with the Township's retirement incentive agreement with Mr. Mott has been actuarially determined to be $237, 620[.]" The Division demanded that the Township reimburse this amount to the Police and Firemen's Retirement System (PFRS), together with $6, 371 in "actuarial fees . . . incurred to ...


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