NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-0083-11T2

 A-0099-11T2

 A-0123-11T2

 A-0124-11T2

 A-0157-11T2

 A-0158-11T2

 A-0159-11T2

 A-0195-11T2

 A-0208-11T2

I/M/O TOWN OF HARRISON AND 

FRATERNAL ORDER OF POLICE, LODGE

NO. 116

___________________________________

I/M/O VERNON TOWNSHIP PBA LOCAL 285

CONTRACT

___________________________________

I/M/O BOROUGH OF RAMSEY AND PBA 

LOCAL NO. 155

___________________________________

I/M/O TOWNSHIP OF WOODBRIDGE AND 

PBA LOCAL 38

___________________________________

I/M/O CITY OF LINDEN AND FMBA LOCAL

NO. 234

___________________________________

I/M/O TOWN OF HARRISON AND FMBA

LOCAL NO. 22

___________________________________

I/M/O TOWN OF HARRISON AND PBA 

LOCAL NO. 22

___________________________________

APPROVED FOR PUBLICATION

April 15, 2015

APPELLATE DIVISION
2 A-0083-11T2

I/M/O TOWN OF HARRISON AND FMBA

LOCAL NO. 22

____________________________________

I/M/O CITY OF LINDEN AND FMBA LOCAL 234

_______________________________________

Argued September 17, 2014 – Decided

Before Judges Fuentes, Ashrafi and O'Connor.

On appeal from the New Jersey Division of 

Pension and Benefits.

Paul L. Kleinbaum argued the cause for 

appellant SOA 22A in A-0083-11 (Zazzali, 

Fagella, Nowak, Kleinbaum & Friedman, 

attorneys; Mr. Kleinbaum, on the brief).

Markowitz & Richman, attorneys for appellant 

Town of Harrison and Fraternal Order of 

Police, Lodge No. 116 in A-0083-11 (Matthew 

D. Areman, on the brief).

James M. Mets argued the cause for appellant 

Vernon Township Local 285 Contract in 

A-0099-11 (Mets Schiro & McGovern, LLP, 

attorneys; Mr. Mets and Brian J. Manetta, on 

the brief).

Paul L. Kleinbaum argued the cause for 

appellant Borough of Ramsay and PBA Local 

No. 155 in A-0123-11 (Zazzali, Fagella, 

Nowak, Kleinbaum & Friedman, attorneys; Mr. 

Kleinbaum and Marissa A. McAleer, on the

brief).

Paul L. Kleinbaum argued the cause for 

appellant Township of Woodbridge and PBA 

Local 38 in A-0124-11 (Zazzali, Fagella, 

Nowak, Kleinbaum & Friedman, attorneys; Mr. 

Kleinbaum and Marissa A. McAleer, on the 

brief).

April 15, 2015
3 A-0083-11T2

Daniel J. McCarthy argued the cause for 

appellant City of Linden and FMBA Local No. 

234 in A-0157-11 (John G. Hudak, City 

attorney, Mr. McCarthy, on the brief).

Craig S. Gumpel argued the cause for 

appellant FMBA Local No. 234 in A-0157-11 

(Mr. Gumpel and Bassel Bakhos, on the 

brief).

Craig S. Gumpel argued the cause for 

appellant Town of Harrison and FMBA Local 

No. 22 in A-0158-11 (Mr. Gumpel and Bassel 

Bakhos, on the brief).

Paul L. Kleinbaum argued the cause for 

appellant Town of Harrison and PBA Local No. 

22 in A-0159-11 (Zazzali, Fagella, Nowak, 

Kleinbaum & Freidman, attorneys; Mr. 

Kleinbaum and Marissa A. McAleer, on the 

brief).

Javerbaum, Wurgaft, Hicks, Kahn, Wikstorm & 

Sinns, attorneys for appellants in Town of 

Harrison and FMBA Local 22 in A-0195-11, 

join in the briefs of co-appellants.

Craig S. Gumpel argued the cause for 

appellant City of Linden and FMBA Local 234 

in A-0208-11 (Mr. Gumpel and Bassel Bakhos, 

on the brief).

Eileen S. Den Bleyker, Senior Deputy 

Attorney General, argued the cause for 

respondent New Jersey Division of Pensions 

and Benefits (John J. Hoffman, Acting 

Attorney General, attorney; Ms. Den Bleyker, 

on the brief).

The opinion of the court was delivered by

FUENTES, P.J.A.D.

In this opinion, we decide nine appeals filed by five 

municipalities and four collective bargaining agents (unions) 
4 A-0083-11T2

that represent police officers and firefighters employed by 

these municipalities. Although the respective functions of 

these appellants and the traditional roles they have 

historically played have cast them as antagonists, they speak 

with one voice here. These parties have mounted a collective 

legal challenge to the Acting Director of the Division of 

Pensions and Benefits' decision to refuse to implement the final 

determination of the Board of Trustees of the Police and 

Firemen's Retirement System (PFRS Board of Trustees), which 

found certain senior officer and longevity pay provisions in the 

collective bargaining agreements entered into by appellants were 

creditable compensation for pension purposes under N.J.S.A.

43:16A-1(26)(a).

Thus, to be clear, we do not decide here whether the 

particular longevity pay provisions in these collective 

bargaining agreements constitute creditable compensation 

benefits as defined in N.J.S.A. 43:16A-1(26)(a) or N.J.A.C.

17:4-4.1. The singular legal question before us is this: Does 

the Acting Director of the Division of Pensions and Benefits 

have the legal authority to refuse to implement a final decision 

of the PFRS Board of Trustees because the Acting Director has 

independently concluded that the decision of the PFRS Board of 

Trustees is legally incorrect? After reviewing the statutory 
5 A-0083-11T2

scheme established by the Legislature in the Police and 

Firemen's Retirement System Act, N.J.S.A. 43:16A-1 to -68, and 

the regulations promulgated by the PFRS Board of Trustees to 

administer this system, we conclude the answer to this question 

is unequivocally "no."

The Legislature vested the PFRS Board of Trustees with 

exclusive authority and "responsibility for the proper operation 

of the retirement system." N.J.S.A. 43:16A-13(a)(1). Although 

the Division of Pensions and Benefits has the power and 

responsibility to "investigate increases in compensation 

reported for credit which exceed reasonably anticipated annual 

compensation increases for members of the retirement system[,] . 

. . cases where a violation of the statute or rules is suspected 

shall be referred to the Board." N.J.A.C. 17:4-4.1(d) (emphasis 

added). 

The PFRS Board of Trustees has the authority to "question 

the compensation of any member or retiree to determine its 

credibility where there is evidence that compensation reported 

as base salary may include extra compensation." N.J.A.C. 17:4-

4.1(b). Only this court has the legal authority to overturn a 

final decision of the PFRS Board of Trustees in the context of 

an appeal filed by a member of the PFRS. See N.J.A.C. 17:4-

1.7(a); R. 2:2-3(a)(2). The action taken by the Acting Director 
6 A-0083-11T2

in the cases before us lacked statutory or regulatory authority 

and was therefore ultra vires, without legal force or effect. 

See Lourdes Med. Ctr. v. Bd. of Review, 197 N.J. 339, 378 

(2009).

We start our factual recitation with a brief overview of 

the longevity salary increase provisions in the various 

collective bargaining agreements negotiated by the 

municipalities and unions that have appealed the Acting 

Director's actions.

I

Town of Harrison

We have consolidated the following appeals affecting the 

Town of Harrison: I/M/O Town of Harrison and PBA Local No. 22, 

Docket No. A-0159-11; I/M/O Town of Harrison and FOP, Lodge No. 

116, Docket No. A-0083-11; I/M/O Town of Harrison and FMBA Local 

No. 22, Docket No. A-0158-11; and I/M/O Town of Harrison and 

FMBA Local No. 22, PBA Local No. 22, and SOA 22A, Docket No. A0195-11. The Fraternal Order of Police, Lodge No. 116 (FOP 

Lodge 116), Police Benevolent Association, Local No. 22 (PBA 

Local 22), and Firemen's Mutual Benevolent Association, Local 

No. 22 (FMBA Local 22) filed briefs in support of these appeals 

and join in each other's arguments. The Town of Harrison has 
7 A-0083-11T2

also joined in these appeals challenging the action taken by the 

Acting Director.

Police Officers

FOP Lodge 116 identifies itself as "a labor organization 

and representative within the meaning of N.J.S.A. 34:13A-3(e)." 

This appellant represents all uniformed officers in the Harrison 

Police Department holding the ranks of Sergeant, Lieutenant and 

Captain, for purposes of collective bargaining. In 2007, FOP 

Lodge 116 was certified as the exclusive bargaining agent for 

all superior officers employed by Harrison. FOP Lodge 116 

entered into a collective bargaining agreement with Harrison, 

which was valid from January 1, 2007 through December 31, 2011. 

Before 2007, PBA Local 22 represented police officers holding a 

supervisory rank. 

Since 1999, the two principal bargaining agents 

representing superior officers in the Harrison Police Department1

negotiated a provision in their collective bargaining agreements 

allowing for increases to officers' base salary contingent upon 

their years of service with the Town. This longevity clause 

provides as follows:

 

1 PBA Local 22 represented these officers from 1999 to 2007; FOP 

Lodge 116 was the recognized bargaining agent from January 1, 

2007 through December 31, 2011.
8 A-0083-11T2

ARTICLE XVIII 

LONGEVITY

Section 1: In addition to wages, members 

shall receive longevity as follows:

After three years: Two (2%) percent

After five years: Four (4%) percent

After ten years: Six (6%) percent

After fifteen years: Eight (8%) percent

After twenty years: Ten (10%) percent

Start of twenty-three years: Twelve (12%) 

percent

Start of twenty-four years: Fourteen (14%) 

percent

Section 2: Longevity will be paid in weekly 

salaries.

This precise language was adopted in the Article XVLongevity provision of the Harrison salary ordinance to mirror 

the provisions contained in the parties' collective negotiations 

agreement. Article XVIII was included, verbatim, in the 

contract between Harrison and PBA Local 22, effective January 1, 

1999 through December 31, 2001. By letter dated June 15, 2000, 

Regina M. Trauner, the secretary of the PFRS Board of Trustees 

at the time, formally advised Harrison that the PFRS Board of 

Trustees found the "stipend referred to in Article XIX Workday 
9 A-0083-11T2

of the agreement" was "not considered creditable for pension 

purposes."

Because Trauner did not mention the longevity provision in 

her June 15, 2000 letter, Harrison and FOP Lodge 116 inferred 

from this absence of criticism that the PFRS Board of Trustees 

had tacitly approved the longevity provision.2 According to FOP 

Lodge 116, it and Harrison "continued to negotiate successor 

agreements" based on this "tacit approval of the negotiated 

longevity provision[.]" Article XVIII remained in the 2007-2011 

collective bargaining agreement between FOP Lodge 116 and 

Harrison.

By letter dated January 21, 2011, Michael R. Czyzyk, the 

Division's Supervisor, External Audits, informed Harrison's 

Chief Financial Officer (CFO) that the Division had determined 

"that the longevity compensation, as a component of the 

ordinance, is not creditable in its entirety for pension 

purposes as per N.J.A.C. 17:2-4.1."

3

 

2 We must point out that prudence dictates that Harrison should 

have been more proactive. Under these circumstances, Harrison 

should have obtained a formal statement from the PFRS Board of 

Trustees confirming it had approved the specific longevity 

provision.

3 The relevant section of this regulation states:

The compensation of a member subject to 

pension and group life insurance 

(continued)
10 A-0083-11T2

As explained by External Audit Supervisor Czyzyk, the 

Division found

that the longevity increment from 10% to 12% 

in the 23rd year of service and the 

longevity increment from 12% to 14% in the 

24[th] year of service incrementally 

excessive compared to prior increases. 

Also, granting such an increase in the 23rd 

and 24th year of an employee's service is 

clearly being awarded in order to enhance 

that member's retirement benefit.

Of particular relevance here, the Division also explained to 

Harrison's CFO that this determination was merely an interim 

step, subject to further scrutiny if the employees affected by 

it exercised their rights to appeal:

The Division will not implement this 

Administrative determination until 90-days 

have elapsed from the date of this letter to 

permit any members who wish to appeal 

adequate time to do so. Please provide a 

copy of this letter to all employees and 

retirees who are affected by this 

 

(continued)

contributions and creditable for retirement 

and death benefits in the system shall be 

limited to base salary and shall not include 

extra compensation. Forms of compensation 

that have been identified as extra 

compensation include, but are not limited 

to:

. . . .

Increments or adjustments in recognition of

the member's forthcoming retirement[.]

[N.J.A.C. 17:2-4.1(a)(10).]
11 A-0083-11T2

determination. Any affected member who 

disagrees with the determination may appeal 

to the PERS Board of Trustees by writing a 

letter setting forth the reasons thereof. 

The appeal should be directed to the 

attention of Kathleen Coates, Board 

Secretary to the PERS Board of Trustees, at 

the address on the letterhead.

Despite references in the letter to the right to appeal to 

the Public Employee Retirement System (PERS) Board of Trustees, 

by letters dated March 25, 2011 and August 16, 2002, the 

Division acknowledged the PFRS Board of Trustees' jurisdiction 

to hear appeals from its administrative determination. In fact, 

in his March 25, 2011 letter, Czyzyk acknowledged that "Harrison 

[Town] employees enrolled in the PFRS have filed appeals after 

receiving the Division's January 21, 2011 correspondence." 

Thus, "[i]n order to provide both the PERS and PFRS Trustees 

with a complete record of the matter," Czyzyk requested Harrison 

to 

please forward to my attention . . . all 

contracts, agreements, including addendums 

and sidebar agreements currently in-force as 

well as individual agreements and ordinances 

for all individuals or groups of individuals 

affected by a longevity provision as 

described in the Division's January 21, 2011 

correspondence. 

(Emphasis added).4

 

4 We have highlighted the word "correspondence" to distinguish 

it from the Acting Director's subsequent characterization of the 

Division's action as a "final administrative determination" 

(continued)
12 A-0083-11T2

In accordance with the instructions in Czyzyk's January 21, 

2011 letter, on April 12, 2011, FOP Lodge 116 appealed the 

Division's "administrative determination" to the PFRS Board of 

Trustees. On April 15, 2011, the Secretary to the PFRS Board of 

Trustees informed the parties that the appeal would be 

considered on May 2, 2011. By letter dated May 5, 2011, the 

PFRS Board of Trustees issued a final decision, which approved 

the longevity schedule and rejected the Division's 

"administrative determination" reflected in Czyzyk's January 21, 

2011 letter. The letter, signed by the PFRS Board of Trustees'

Secretary, Wendy Jamison, stated:

Based on a review of the pertinent 

documents, the PFRS Board voted to approve 

the longevity schedule as cited in Article 

XVIII of the current contract dated January 

1, 2007 to December 31, 2011.

Consequently, there will be no change in any 

of the retiree's monthly PFRS retirement 

allowances.

Nearly three months after the PFRS Board of Trustees' final 

decision, Florence J. Sheppard, the Division's then Acting 

Director, sent a letter dated July 27, 2011, addressed to the 

attorneys representing the affected parties. After reinstating 

 

(continued)

legally competent to supersede the PFRS Board of Trustees'

conflicting determination, and subject to appellate review by 

this court under Rule 2:2-3(a)(2) as a final agency decision.
13 A-0083-11T2

the analysis reflected in Czyzyk's January 21, 2011 letter, 

Sheppard informed the parties that "the Division will not 

implement the decision of the Board to permit such increases as 

creditable for pension retirement credit." Sheppard concluded 

her letter by informing the recipients, "[y]ou have the right to 

appeal this final administrative action to the Superior Court of 

New Jersey, Appellate Division, within 45 days of the date of 

this letter in accordance with the Rules Governing the Courts of 

the State of New Jersey."

FOP Lodge 116, PBA Local 22, and the Town of Harrison have 

appealed to this court, arguing the Acting Director did not have 

the legal authority to refuse to implement a final decision of 

the PFRS Board. They seek an order from this court directing 

the Division to implement the PFRS Board of Trustees' decision. 

Firefighters

Harrison FMBA Local 22 describes itself as "the exclusive 

bargaining representative for uniformed employees in the Fire 

Department of the Town of Harrison below the rank of Chief." 

FMBA Local 22 and Harrison entered into a collective bargaining 

agreement effective January 1, 2007 through December 31, 2011. 

Article XX of that agreement contains a longevity provision 

identical to the provision in the contract between Harrison and 
14 A-0083-11T2

the bargaining agents that represented the police officers 

described supra.

According to FMBA Local 22, Harrison has had a longevity 

program since at least 1976. In a certification submitted in 

this appeal, Harrison Fire Department Battalion Chief and former 

FMBA president Michael Greene describes the history of longevity 

pay in the FMBA's contracts is as follows:

From 1976 to 1983, all Town employees 

received the following longevity:

After five years Two (2%) percent

After ten years Four (4%) percent

After fifteen years Six (6%) percent

After twenty years Eight (8%) percent

. . . .

In 1984, the longevity provision of the FMBA 

agreement was as follows:

After three (3) years One (1%) percent

After five (5) years Three (3%) percent

After ten (10) years Five (5%) percent

After fifteen (15) years Seven (7%) percent

After twenty-two (22) years Nine (9%) 

percent

. . . .

In 1985 . . . :

After three (3) years Two (2%) percent

After five (5) years Four (4%) percent

After ten (10) years Six (6%) percent

After fifteen (15) years Eight (8%) percent
15 A-0083-11T2

After twenty-two (22) years Ten (10%) 

percent.5

The longevity schedule increased throughout the years until 

about January 1, 1996, when the current formula was adopted. 

According to Greene, "[t]his formula for longevity is the same 

as the current longevity schedule and has been in at least five 

(5) collective negotiations agreements, including the current 

one which expires December 31, 2011." Stated differently, these 

longevity provisions have been considered creditable 

compensation for pension purposes, allowing retired firefighters 

to receive pension benefits inclusive of longevity since 1976.

FMBA Local 22 asserts that the Division has reviewed and 

acquiesced to the creditability for pension purposes of these 

same longevity provisions on multiple prior occasions. The 

record before us contains a letter dated August 16, 2002, 

written by External Audit Supervisor Czyzyk to the Harrison Town 

Clerk. Czyzyk informed the Clerk in this letter that the audit 

section of the Division had determined that several provisions 

of the FMBA Local 22 contract applicable from January 1, 1999 

through December 31, 2002, including the longevity provision, 

were "in violation" of the creditable compensation provision, 

N.J.A.C. 17:4-4.1.

 

5 The Senior Deputy Attorney General representing the Division 

in this appeal did not object to this exhibit. 
16 A-0083-11T2

The record before us concerning how this 2002 notice of 

"violation" from Czyzyk was addressed and resolved by Harrison 

and FMBA Local 22 is murky at best. The paper trail in support 

of appellants' position consists of a series of contemporaneous 

correspondence from the attorneys representing both FMBA Local 

22 and Harrison memorializing telephone discussions and 

agreements allegedly reached with a Division representative 

named JoAnn E. Martin. The three outstanding issues were 

identified by the attorney representing FMBA Local 22 in his 

October 1, 2002 letter to the attorney representing Harrison:

1. Fire Sub-Code Official Stipend. A 

letter from the Town clarifying the actual 

title would resolve the issue.

2. Execution of Side Agreement clarifying 

holiday pay in base pay would resolve the 

issue.

3. Longevity issue sent to Committee on 

Creditable Compensation for review. 

(Emphasis added).

The record does not contain a direct indication that 

Harrison reached an agreement with the Division addressing the 

longevity issue highlighted in Item 3 above. The record is 

equally barren of any correspondence or notice of violation from 

the Division on the longevity issue during the nine-year period 

from 2002 to 2011. However, whether Harrison and FMBA Local 22 

reached an agreement with the Division concerning the violation 
17 A-0083-11T2

referred to by Czyzyk in 2002 is not relevant to the question 

before us. As we made clear in our prefatory remarks, this 

appeal is limited to a single legal question: whether the 

Director of the Division of Pensions and Benefits has the legal 

authority to refuse to implement a final decision reached by the 

PFRS Board of Trustees. 

On January 21, 2011, the same date Czyzyk announced his 

decision to FOP Lodge 116 regarding the longevity provisions in 

the agreement with the police officers, he communicated the same 

determination that FMBA Local 22's longevity provision was not 

creditable for pension purposes under N.J.A.C. 17:2-4.1. On 

April 18, 2011, FMBA Local 22 appealed the Division's January 

21, 2011 "administrative determination" to the PFRS Board of 

Trustees. On May 2, 2011, the PFRS Board of Trustees rejected 

the Division's determination and approved the longevity schedule 

cited in the collective bargaining agreement.

Consistent with the position she took with respect to the 

longevity provision in the collective bargaining agreement 

involving the police officers, the Acting Director announced the 

Division would not implement the decision of the PFRS Board of 

Trustees with respect to the longevity provisions in the 

agreement Harrison entered into with FMBA Local 22. In fact, 
18 A-0083-11T2

the Acting Director used nearly identical language in the letter 

affecting the firefighters.

 On August 5, 2011, the attorneys representing FMBA Local 

22 wrote to the Acting Director to express their disagreement 

with her decision to disregard the final determination of the 

PFRS Board of Trustees. The firefighters also disagreed that 

her unprecedented, unilateral decision was reviewable as of 

right by this court under Rule 2:2-3(a)(2). The Acting Director 

did not respond to FMBA Local 22's letter. FMBA Local 22 now 

appeals to this court seeking the same relief sought by the Town 

of Harrison and the Unions representing the police officers.

II

City of Linden

The appeals involving Linden relate to the collective 

bargaining agreement Linden entered into with FMBA Local 234 

effective January 1, 2005. FMBA Local 234 and Linden also have 

a Memorandum of Understanding (MOU) covering the period from 

January 1, 2009 through December 31, 2013. The first provision 

at issue in this case involves Article VIII Section D of the 

parties' now expired collective bargaining agreement:

D. Senior Fire Officer Differential

Effective January 1, 2000, Fire officers who 

have completed their twentieth (20th) year 

of service with the City of Linden shall 

receive a Senior Fire Officer Differential 
19 A-0083-11T2

in the amount of $1,500.00 per year to be 

paid in equal bi-weekly installments.

Article VIII of the agreement, effective January 1, 2009 

through December 31, 2013,6 also includes the following 

provision:

C. Senior Deputy Chief Differential

Effective January 1, 2010, Senior Officer 

Pay shall be as follows:

Beginning of 14th year of service: $1,000.00

Beginning of 21st year of service: $1,750.00

Beginning of 24th year of service: $2,250.00

Said pay shall be non-cumulative and paid in

equal bi-weekly installments.

By letters dated January 15, 2010 and March 18, 2010, 

Division auditor Jean C. Monahan began reviewing the collective 

bargaining agreement Linden had entered into with FMBA Local 

234, effective January 1, 2005 through December 31, 2008. 

Monahan asked Linden's Labor Relations Specialist, attorney 

Allan C. Roth, whether "compensation associated" with the Senior 

Fire Officer Differential reflected in Article VIII, Section C 

was "reported as creditable salary for pension purposes[.]" 

Neither Roth nor any other representative of Linden responded to 

Monahan's requests for "clarification" of the compensation 

 

6 This exact language was also included in paragraph 18 of an 

MOU entered into before the 2009-2013 agreement was successfully 

negotiated. 
20 A-0083-11T2

awarded to firefighters under this provision of the collective 

bargaining agreement.

 On October 19, 2010, Supervisor of External Audits Czyzyk 

wrote Roth, in his capacity as Linden's legal representative, 

advising him that "[a]fter careful review" of the collective 

bargaining agreement and the MOU, the Division had made "an 

administrative determination" that these agreements contained 

provisions "that may be in violation of the statutes and 

regulations which set forth those forms of compensation that are 

creditable for pension purposes. N.J.A.C. 17:4-4.1(a)(1) and 

(2)." (Emphasis added). Czyzyk specifically noted that "[t]he 

Division finds that senior officer compensation payable in the 

20th, 21st and 24th year of service is extra compensation 

received in anticipation of retirement and in violation of 

N.J.A.C. 17:4-4.1(a)1 and 2(ix) and (xiii)."

7

As he did in his correspondence with the Town of Harrison, 

Czyzyk concluded his letter to Roth with the following 

statement:

The Division will not implement this 

Administrative determination until 90 days 

have elapsed from the date of this letter to 

permit any members who wish to appeal 

 

7 The October 19, 2010 letter from Czyzyk contains a 

comprehensive review of these two labor agreements. Czyzyk 

raises other questions and concerns in this letter that are not 

germane to the issues raised in this appeal.
21 A-0083-11T2

adequate time to do so. Please provide a 

copy of this letter to all employees and 

retirees who are affected by this 

determination. Any affected member who 

disagrees with the determination may appeal 

to the PFRS Board of Trustees by writing a 

letter setting forth the reasons thereof. . 

. . 

You should not make any adjustments to the 

creditable salary you currently report on 

these members until the end of the 90-day 

appeal period. . . . 

At the end of the 90-day period, if no 

outstanding appeals are pending or if no 

action was taken by the PFRS Board of 

Trustees, the Division will instruct you to 

change the creditable salary reported to 

conform to this determination. . . .

(Emphasis added).

Linden sought to appeal the Division's October 19, 2010 

determination in a letter addressed to Czyzyk dated January 17, 

2011. Linden also included in this letter-appeal the 

"additional information" Czyzyk had requested nearly two months 

earlier. In his capacity as Linden's Labor Relations Specialist 

counsel, Roth claimed that the Senior Deputy Chief Differential 

was negotiated after the agreement had been submitted to 

arbitration. According to Roth, the arbitrator "awarded senior 

officer pay, in lieu of increasing or re-establishing 

longevity." Thus, under the collective bargaining agreements:

[N]o employee hired after December 31, 1974 

was entitled to receive longevity. However, 

with the arbitrator's award of compensation 
22 A-0083-11T2

entitled "senior officer pay" all uniformed 

fire department employees are entitled to 

[this] pay, which was and is now paid as 

part of salary through the City's bi-weekly 

pay system. Therefore, the City and the 

FMBAs believe the pay to be pensionable and 

in compliance with N.J.A.C. 4A:17-4:4.1(iv).

On March 18, 2011, FMBA Local 234 submitted a letter in support 

of Linden's position. 

On May 2, 2011, the PFRS Board of Trustees reversed the 

Division's administrative determination and found the senior 

officer pay differentials to be creditable compensation for 

pension purposes. Once again, the Division's Acting Director 

refused to implement the PFRS Board of Trustees' final decision. 

In her letter dated July 27, 2011, the Acting Director again 

found the "individual salary adjustments" were "granted 

primarily in anticipation of the member's retirement," in 

violation of N.J.S.A. 43:16A-1(26)(a).

As was the case with respect to the Town of Harrison, FMBA 

Local 234 objected to the Acting Director's unilateral 

determination. The Acting Director did not respond. FMBA Local 

234 filed this appeal thereafter.

III

Vernon Township

Vernon Township entered into a collective negotiations 

agreement (CNA) with PBA Local 285 effective January 1, 2008 
23 A-0083-11T2

through December 31, 2011. The disputed provisions at issue in 

this appeal are found in Article XVII of that agreement, which 

provides as follows:

A. The salaries from Employees covered by 

this AGREEMENT shall be as set forth on 

Schedule A annexed.

B. The differential between ranks shall be 

ten (10%) percent above the prior grade.

. . . .

E. An Officer having twenty (20) years of 

service within the meaning of the Police and 

Fire Retirement System or having fifteen 

(15) years of service with Vernon Township 

and ten (10) years of Law Enforcement 

experience shall be elevated one-half (1/2) 

the distance in pay to the next higher rank, 

and this will be added to and become part of 

the Officer's base salary.

On May 20, 2010, Czyzyk wrote a letter to Vernon's 

Personnel Director, Pennie Roland, advising her that

[a]fter careful review of the PBA Local #285 

Contract for the period January 1, 2008 

through December 31, 2011 . . . the Division 

has made an administrative determination 

that the . . . contract contains a provision 

that is causing monies to be included in the 

base salary reported to the Division that is 

not creditable for pension purposes.

After specifically identifying "Article XVII: Salaries: 

Paragraph E" as the problematic provision, Czyzyk explained that 

the Division "considers this to be compensation given to a 

member in anticipation of retirement." Czyzyk concluded his 
24 A-0083-11T2

letter to Vernon's Personnel Director Roland with the same 

admonition he included in his communications with the Town of 

Harrison and the City of Linden. (See supra, Part I, at 9-11; 

and Part II, at 20-21). In the interest of clarity, Czyzyk 

concluded his letter by emphasizing the following three points: 

(1) the Division would not implement this action for ninety days 

to permit employees adequate time to appeal to the PFRS Board of 

Trustees; (2) the Township should not make any adjustment to the 

creditable salary until the end of the appeal period; and (3) 

the Division would instruct the Township how to implement its 

determination only "if no outstanding appeals [were] pending or

if no action was taken by the PFRS Board of Trustees." 

(Emphasis added). 

Following the Division's instructions, PBA Local 285 

appealed the May 20, 2010 "administrative determination" to the 

PFRS Board of Trustees on August 11, 2010. After an initial 

postponement to consider additional information submitted by PBA 

Local 285 concerning the financial impact of the terms of the 

contract, the PFRS Board of Trustees met on January 10, 2011, 

and formally determined the salary increases provided under 

Article XVII, Paragraph E of the CNA were compensable for 

pension purposes. The PFRS Board of Trustees communicated its 

decision in a letter dated January 12, 2011, from Wendy Jamison, 
25 A-0083-11T2

Secretary to the PFRS Board of Trustees, to the attorneys 

representing PBA Local 285.

After framing the legal question presented to the PFRS 

Board of Trustees by PBA Local 285 on behalf of the members 

affected by the Division's initial administrative determination, 

Secretary Jamison wrote:

The Board voted to approve your request to 

include Paragraph E above as creditable 

compensation in the PFRS. The Board 

considered the salary as an additional pay 

step of the salary scale as denoted on 

schedule A. A copy of this letter is being 

sent to the Internal and External Audit 

Sections of the Division to implement the 

Board's decision.8

More than seven months after the PFRS Board of Trustees'

decision, Acting Director Florence Sheppard sent a letter dated 

July 27, 2011, to the attorneys representing PBA Local 285 

advising them that "the Division will not implement the decision 

of the Board to permit such increases as creditable for pension 

retirement credit." The letter reflects that the Acting 

Director reached this decision after conducting a de novo review 

of the evidence presented to the PFRS Board of Trustees and 

engaging in her own independent legal analysis of the relevant 

statutory and regulatory provisions. The Acting Director did 

 

8 PBA Local 285 included in its Appendix a copy of Secretary 

Jamison's January 12, 2011 letter, which lists Czyzyk as 

receiving a copy of this correspondence.
26 A-0083-11T2

not cite any legal authority to support her decision to refuse 

to implement the decision of the PFRS Board of Trustees.

Consistent with the approach she employed in the cases 

involving the Town of Harrison and the City of Linden, the 

Acting Director concluded her letter by informing PBA Local 285 

that: "You have the right, if you wish, to appeal this final 

administrative action to the Superior Court of New Jersey, 

Appellate Division . . . in accordance with the Rules Governing 

the Courts of the State of New Jersey."

By letter dated August 8, 2011, the attorneys representing 

PBA Local 285 asserted that "[t]he Director of the Division of 

Pensions and Benefits does not have the authority to determine 

what is and is not creditable salary and to ignore decisions of 

the PFRS Board." Citing N.J.S.A. 43:16A-1.2 and N.J.A.C. 17:1-

1.1(g), PBA Local 285 argued the Director's role was limited to 

reviewing the positions covered by the retirement system and 

recommending to the PFRS Board of Trustees whether they should 

remain a covered position for pension purposes. Counsel 

concluded his letter to the Acting Director with the following 

request:

We also respectfully request that, while 

this dispute is pending, you suspend 

implementation of your July 27, 2011 

determination for any PBA Local 285 

collective negotiations unit member who is 

receiving a pension benefit base[d] on the 
27 A-0083-11T2

inclusion of the disputed contractual 

clause. To reduce their pension benefits at 

this time, especially in light of recent 

legislation that will all but eliminate any 

pension COLA [Cost of Living Adjustment], 

will [wreak] havoc on the household budgets 

of these retirees who relied in good faith 

on the Division's calculation of their 

pension benefit.

Thank [you] for your attention to this 

matter. We look forward to your response.

The Acting Director did not respond to this letter. PBA 

Local 285 filed its Notice of Appeal with this court on August 

31, 2011.

IV

Borough of Ramsey

The Borough of Ramsey entered into a collective 

negotiations agreement (CNA) with PBA Local 155 covering the 

period of time from January 1, 2007 through December 31, 2011. 

The CNA included a provision entitled "Salary Schedule" that 

provided as follows:

Senior Officer Pay status is a new category. 

After completing 23 years of service as a 

police officer, top step patrolmen will be 

placed in senior officer pay status. Annual 

salary for those in senior officer pay 

status will be salary that is midway between 

the salary for an 8th step patrolman and a 

sergeant.

The appellate record includes a Ramsey Police Department 

Proposed Salary Schedule from 2003 through 2006. Based on this 
28 A-0083-11T2

salary schedule, "midway between the salary for an 8th step 

patrolman and a sergeant" in 2002 would constitute an annual 

salary differential of approximately $3851.9 The Senior Officer 

Pay differential in 2006 was approximately $4419.10 Senior 

Officer Pay status was a new category, available only to those 

police officers who had completed twenty-three years of service; 

a top step patrol-officer was placed in senior officer pay 

status only after reaching this career milestone.

The case involving PBA Local 155 and Ramsey followed the 

same procedural pattern we have discussed at length in this 

opinion in Part I involving Harrison, Part II involving Linden, 

and Part III involving Vernon. By letter dated October 15, 

2004, Czyzyk advised Ramsey Borough Administrator Nicholas C. 

Sanos that the Division viewed the "Senior Officer Pay" status 

"as a salary adjustment granted primarily in anticipation of the 

member's retirement." As such, these salary increases were not 

 

9 This Salary Schedule shows that in 2002, an annual salary for 

an 8th step patrol-officer was $81,500.87. A sergeant in the 

same level of seniority shows an annual salary in 2002 of 

$89,203.47. The "midway" salary differential between these two 

figures is approximately $3851. 

10 The differential would increase commensurate with the annual 

salary increases. Based on this Salary Schedule, in 2006 an 8th 

step patrol-officer's annual salary was $93,525; a sergeant's 

annual salary with the same level of seniority was $102,364. 

The "midway" salary differential between these two figures is 

approximately $4419.
29 A-0083-11T2

creditable for pension purposes under N.J.S.A. 43:16A-1 and 

N.J.A.C. 17:4-4.1.

As he did with respect to the other three municipalities, 

Czyzyk informed Borough Administrator Sanos that: (1) the 

Division would not implement this action for ninety days to 

permit employees adequate time to appeal to the PFRS Board of 

Trustees; (2) Ramsey should not make any adjustment to the 

creditable salary until the end of the appeal period; and (3) 

the Division would instruct Ramsey how to implement its 

determination only if no outstanding appeals were pending or if 

the PFRS Board of Trustees had not decided otherwise.

PBA Local 155 appealed the Division's administrative action 

to the PFRS Board of Trustees. By letter dated July 12, 2011, 

PFRS Board of Trustees Secretary Wendy Jamison advised the 

attorneys representing PBA Local 155 that the Board had ruled in 

their client's favor:

Based on a review of the pertinent 

documents, the PFRS Board voted to approve 

the salary schedule as cited in the PBA 

Local No. 155 contract, Article III and 

Appendix I dated January 1, 2007 to December 

31, 2011. The Board found the pay was an 

additional salary step as denoted in the 

salary guideline.

Consequently, there will be no change in any 

of the retiree's monthly PRFS retirement 

allowances.
30 A-0083-11T2

The PFRS Board of Trustees' decision in the appeal filed by 

PBA Local 155 triggered a considerably faster,11 albeit familiar 

reaction from Acting Director Sheppard. In a letter dated July 

27, 2011, Sheppard engaged in the same de novo review of the 

record presented to the PFRS Board of Trustees and reached the 

opposite legal conclusion. In the Acting Director's opinion 

"all of the senior officer pay violates the provisions of the 

statute and regulation since the payments are clearly being 

awarded in order to enhance the member's retirement benefit 

'upon attainment of a specified number of years of service.'" 

Once again, Sheppard concluded her letter by apprising those 

affected by her decision that they had the right "to appeal this 

final administrative action" to this court.

By letter dated August 5, 2011, the attorney representing 

PBA Local 155 asked Sheppard the following question:

Please advise me on what authority your 

determination not to enforce the Board's 

decisions is considered the "final 

administrative action" in light of the 

 

11 Sheppard waited three months to communicate her unwillingness 

to implement the PFRS Board of Trustees' decision in the case 

involving police officers and firefighters from the Town of 

Harrison; she took nearly two months to apprise the affected 

police officers in the City of Linden, and more than seven 

months to inform the affected police officers of the Township of 

Vernon. By contrast, in the case involving police officers from 

the Borough of Ramsey, Sheppard sent her refusal letter just two 

weeks after the PFRS Board of Trustees' decision.
31 A-0083-11T2

existing Board of Trustees' decisions which 

have not been appealed to my knowledge.

Sheppard did not respond. On September 6, 2011, PBA Local 155 

filed a Notice of Appeal to this court seeking a judicial 

declaration that the Director of the Division of Pensions and 

Benefits does not have the legal authority to refuse to 

implement a final decision of the PFRS Board of Trustees merely 

because the Director disagrees with the Board's decision. 

Consequently, Sheppard's decision refusing to implement the PFRS 

Board of Trustees' decision is ultra vires, without legal force 

or effect. 

V

Township of Woodbridge

Woodbridge entered into a collective bargaining agreement 

with PBA Local 38 covering the period from January 1, 2009 

through December 31, 2011. Article V of this agreement is 

denoted "Salaries." Paragraph B in Article V provides for a 

"Senior Officer Differential." This provision states:

B. Senior Officer Differential - Employees 

having completed twenty-two (22) years of 

service shall be entitled to a senior 

officer differential benefit. The benefit 

shall be an increase in the base pay rate by 

five and one-half percent (5.5%) and is 

reflected in the senior officers' base rate 

(1st Class)[.]

Article VII is denoted "Longevity," and provides as follows:
32 A-0083-11T2

A. The Township agrees to pay as a fringe 

benefit the following longevity payments:

2.5% after the start of 6th and through 

completion of 10th year or [sic] service;

4% after start of 11th and through 

completion of 14th year of service;

5.5% after start of 15th and through 

completion of 20th year of service;

7% at start of 21st year through completion 

of 22nd year of service;

9.5% at start of 23rd year of service and 

each year thereafter.

By letter dated January 20, 2011, Czyzyk advised Woodbridge 

Township Chief Financial Officer (CFO) Richard Cahill that, 

the Division has made an administrative 

determination that the agreement executed 

between the Township and the Woodbridge 

Policemen's Benevolent Association, Local 

No. 38 contains provisions that may be 

causing monies to be included in the base 

salary reported to the Division that are not 

creditable for pension purposes as per 

N.J.A.C. 17:4-4.1(a)(1) and (2).

After quoting from the regulatory standard, Czyzyk cited 

Article V, Paragraph B "Salaries-Senior Officer Differential"

from the agreement and stated, "[t]he Division finds that senior 

officer compensation payable in the 22nd year of service is 

extra compensation received in anticipation of retirement and in 

violation of N.J.A.C. 17:4-4.1(a)(1) and (2)(ix) and (xiii)." 
33 A-0083-11T2

With respect to Article VII, Paragraph A "Longevity," Czyzyk 

indicated that:

The Division finds that the longevity 

increment from 7% to 9.5% in the 23rd year 

of service incrementally excessive compared 

to prior increases. Also, granting such an 

increase in the 23rd year of an Officer's 

service is clearly being awarded in order to 

enhance that member's retirement benefit.

As he did when he sent similar letters to the other four 

municipalities involved in this appeal, Czyzyk concluded by 

informing Woodbridge CEO Cahill that: (1) the Division would not 

implement this action for ninety days to permit employees 

adequate time to appeal to the PFRS Board of Trustees; (2) 

Woodbridge should not make any adjustment to the creditable 

salary until the end of the appeal period; and (3) the Division 

would instruct Woodbridge how to implement its determination 

only if no outstanding appeals were pending or if the PFRS Board 

of Trustees had not decided otherwise.

PBA Local 38 followed Czyzyk's instructions and appealed 

the Division's January 20, 2011 administrative determination to 

the PFRS Board of Trustees. By letter dated May 5, 2011, PFRS 

Board Secretary Jamison informed the attorneys representing PBA 

Local 38 that:

Based on a review of the pertinent 

documents, the PFRS Board voted to approve 

the senior officer differential as cited in 

Article V and the longevity schedule as 
34 A-0083-11T2

cited in Article VII of the [collective 

bargaining] contract.

Consequently, there will be no change in any 

of the retiree's monthly PFRS retirement 

allowances.12

 

By letter dated July 27, 2011,13 Sheppard informed the 

attorneys representing PBA Local 38 that "the Division will not 

implement the decision of the Board to permit such increases as 

creditable for pension retirement credit." Once again, the 

Acting Director reached this conclusion after engaging in a de 

novo review of the evidence presented by PBA Local 38 to the 

PFRS Board of Trustees. Finally, as she had done in the cases 

involving the other four municipalities in this appeal, the 

Acting Director advised PBA Local 38 that it had "45 days [from] 

the date of this letter" to appeal her "final administrative 

action" to this court "in accordance with the Rules Governing 

the Courts of the State of New Jersey." 

By the time the Acting Director made this decision, the law 

firm representing PBA Local 38 also represented the Town of 

Harrison and PBA Local 22, and the Borough of Ramsey and PBA 

 

12 As she had done in her prior correspondence, Jamison copied 

Czyzyk in this letter. 

13 The Acting Director's letter was dated nearly three months 

after the PFRS Board of Trustees communicated its final decision 

to PBA Local 38 and to the Division's Supervisor of External 

Audits. 
35 A-0083-11T2

Local 155. By letter dated August 5, 2011, the attorney for PBA 

Local 38 asked Sheppard the same question he had asked on behalf 

of PBA Local 155:

Please advise me on what authority your 

determination not to enforce the Board's 

decisions is considered the "final 

administrative action" in light of the 

existing Board of Trustees' decisions which 

have not been appealed to my knowledge.

Once again, the Acting Director did not respond. PBA Local 

38 filed its appeal to this court on September 6, 2011, seeking 

a judicial declaration that the Acting Director's action in 

refusing to implement a final decision of the PFRS Board of 

Trustees is ultra vires, without legal force or effect.

VI

Legal Analysis

All appellants argue the Acting Director did not have the 

authority to act unilaterally and refuse to implement a final 

decision reached by the PFRS Board of Trustees. We agree. 

Under the statutory and regulatory scheme established to 

administer this pension system, the PFRS Board of Trustees is 

the only administrative body authorized to make a final 

administrative determination regarding what can be considered 

"creditable compensation" for pension benefits under N.J.S.A.

43:16A-1(26)(a) and N.J.A.C. 17:4-4.1.
36 A-0083-11T2

The PFRS is "a statewide pension system for full-time 

policemen and firemen designed to ensure the uniform protection 

of all such public officers through the medium of pensions 

payable from [the] fund." Saccone v. Bd. of Trs. of Police & 

Firemen's Ret. Sys., 219 N.J. 369, 378-79 (2014) (quoting Seire 

v. Police & Fire Pension Comm'n of Orange, 6 N.J. 586, 591 

(1951)). In 1955, the Legislature "transferred" the PFRS Board 

of Trustees to the Division of Pensions and Benefits in the 

Department of the Treasury.14 N.J.S.A. 52:18A-96. However, the 

Legislature also made clear that these public pension boards 

retained "all of their respective present functions, powers, 

duties, equipment and records[.]" Ibid. (emphasis added).

The Legislature vested the PFRS Board of Trustees with "the 

general responsibility for the proper operation of the 

retirement system." N.J.S.A. 43:16A-13(a)(1). The PFRS Board 

consists of eleven trustees who are selected in the following 

fashion:

(a) Five members to be appointed by the 

Governor, with the advice and consent of the 

 

14 The Legislature also transferred to the Division of Pensions 

in the Treasury Department the "Board of Trustees of the Public 

Employees' Retirement System, the Prison Officers' Pension 

Commission, the Board of Trustees of the Teachers' Pension and 

Annuity Fund, the Board of Trustees of the Alcoholic Beverage 

Law Enforcement Officers' Pension Fund . . . and the 

Consolidated Police and Firemen's Pension Fund Commission[.]" 

Ibid. 
37 A-0083-11T2

Senate, who shall serve for a term of office 

of four years and until their successors are 

appointed and who shall be private citizens 

of the State of New Jersey who are neither 

an officer thereof nor an active or retired 

member of any police or fire department 

thereof. Of the four members initially 

appointed by the Governor . . . one shall be 

appointed for a term of one year, one for a 

term of two years, one for a term of three 

years, and one for a term of four years. 

(b) The State Treasurer or the deputy State 

Treasurer, when designated for that purpose 

by the State Treasurer.

(c) Two policemen and two firemen who shall 

be active members of the system and who 

shall be elected by the active members of 

the system . . . .

(d) One retiree from the system who shall be 

elected by retirees from the system . . . .

[N.J.S.A. 43:16A-13(a)(2)(a)-(d).]

The five "public" unaffiliated trustees who are appointed 

by the Governor, with the advice and consent of the Senate, 

serve for a term of "four years and until their successors are 

appointed[.]" N.J.S.A. 43:16A-13(a)(2)(a). The State Treasurer 

or deputy State Treasurer serves on a permanent basis, without a 

fixed term. N.J.S.A. 43:16A-13(a)(2)(b). The two active police 

officers and two active firefighters are "elected by the active 

members of the system" and serve "for a term of four years 

according to such rules and regulations as the board of trustees 

shall adopt to govern such election." N.J.S.A. 43:16A-
38 A-0083-11T2

13(a)(2)(c). The final member must be a "retiree" from the 

pension system, who can be either a former police officer or 

firefighter. This trustee serves "for a term of four years 

according to such rules and regulations as the board of trustees 

shall adopt to govern the election." N.J.S.A. 43:16A13(a)(2)(d).

All trustees of the PFRS Board must "take an oath of 

office" affirming to fulfill his or her duties as a board member 

"diligently and honestly." N.J.S.A. 43:16A-13(a)(3). Each 

trustee also affirms under oath that he or she "will not 

knowingly violate or willingly permit to be violated any of the 

provisions of the law applicable to the retirement system." 

Ibid. This oath of office must be "subscribed by the member 

making it, and certified by the officer before whom it is taken, 

and immediately filed in the office of the Secretary of State." 

Ibid. 

The members of the PFRS Board of Trustees serve without 

compensation, entitled only to be "reimbursed for all necessary 

expenses that they may incur through service on the board." 

N.J.S.A. 43:16A-13(a)(5). Each trustee has an equal vote on the 

board, regardless of how he or she was selected to serve, and 

six duly appointed trustees "must be present at any meeting" in 
39 A-0083-11T2

order for the Board to be able to transact business. N.J.S.A.

43:16A-13(a)(6).

Subject to the limitations of Police and Firemen's 

Retirement System Act, N.J.S.A. 43:16A-1 to -68, the PFRS Board 

of Trustees is obligated, on an annual basis, "to establish 

rules and regulations for the administration of the funds 

created by this act and for the transaction of the board's and 

committees' business." N.J.S.A. 43:16A-13(a)(7). Because 

decisions made by the PFRS Board of Trustees may affect other 

public pension systems administered by other public pension 

boards,15 these "rules and regulations shall be consistent with 

those adopted by the other pension funds within the Division of 

Pensions and Benefits in order to permit the most economical and 

uniform administration of all such retirement systems." Ibid. 

The Legislature also described the function it expected the 

Director to perform in assisting the Board of Trustees in 

carrying out the responsibilities of its office. "The Director 

of the Division of Pensions and Benefits shall appoint a 

qualified employee of the division to be secretary of the board. 

The administration of the program shall be performed by the 

personnel of the Division of Pensions and Benefits." N.J.S.A.

43:16A-13(a)(8) (emphasis added).

 

15 See N.J.S.A. 52:18A-96.
40 A-0083-11T2

The role and function of the Director of the Division of 

Pensions and Benefits is equally defined under the prevailing 

statutory and regulatory system: 

The Division of Pensions established 

hereunder shall be headed, directed and 

supervised by a director, who shall be a 

person qualified by training and experience 

to direct the work of such division. The 

director of such division shall be appointed 

by the Governor, with the advice and consent 

of the Senate, and shall serve during the 

term of the Governor appointing him, and 

until the director's successor is appointed 

and has qualified. The Director of the 

Division of Pensions shall receive such 

salary as shall be provided by law.

[N.J.S.A. 52:18A-99.]

The role of the Division to assist the PFRS Board of Trustees is 

clearly delineated in the regulations adopted to administer this 

public pension:

With respect to all claims for benefits, the 

Division of Pensions and Benefits shall 

investigate increases in compensation 

reported for credit which exceed reasonably 

anticipated annual compensation increases 

for members of the retirement system based 

upon consideration of the Consumer Price 

Index for the time period of the increases, 

the table of assumed salary increases 

recommended by the actuary and adopted by 

the Board, and the annual percentage 

increases of salaries as indicated in data 

from the Public Employment Relations 

Commission, or through other reliable 

industry sources of information regarding 

average annual salary increases. Those cases 

where a violation of the statute or rules is 

suspected shall be referred to the Board.
41 A-0083-11T2

[N.J.A.C. 17:4-4.1(d) (emphasis added).]

The Division has the same obligation generally to "investigate 

increases in compensation reported for credit, which exceed 

reasonably anticipated annual compensation increases for members 

of the retirement system," N.J.A.C. 17:1-7.3(a), and report to 

the "respective Board or Commission" cases "where a violation of 

the statute is suspected." N.J.A.C. 17:1-7.3(b).

This regulatory scheme is reflected in every letter 

authored and sent to every appellant by Michael Czyzyk, the 

Division's Supervisor of External Audits. As Czyzyk dutifully 

explained:

The Division will not implement this 

Administrative determination until 90 days 

have elapsed from the date of this letter to 

permit any members who wish to appeal 

adequate time to do so. Please provide a 

copy of this letter to all employees and 

retirees who are affected by this 

determination. Any affected member who 

disagrees with the determination may appeal 

to the PFRS Board of Trustees by writing a 

letter setting forth the reasons thereof. . 

. .

You should not make any adjustments to the 

creditable salary you currently report on 

these members until the end of the 90-day 

appeal period. . . .

At the end of the 90-day appeal period, if 

no outstanding appeals are pending or if no 

action was taken by the PFRS Board of 

Trustees, the Division will instruct you to 
42 A-0083-11T2

change the creditable salary reported to 

conform to this determination.

The PFRS Board of Trustees has the authority to "question 

the compensation of any member or retiree to determine its 

credibility where there is evidence that compensation reported 

as base salary may include extra compensation." N.J.A.C. 17:4-

4.1(b). The PFRS Board of Trustees is empowered to conduct 

investigations of "increases in compensation reported for credit 

which exceed reasonably anticipated annual compensation 

increases for members of the retirement system." In re 

Snellbaker, 414 N.J. Super. 26, 34 (App. Div. 2010) (citation 

omitted).

If resolution of a question before the PFRS Board of 

Trustees "involves a question of facts," the Board has the legal 

authority to refer the matter to the Office of Administrative 

Law for an evidentiary hearing before an Administrative Law 

Judge. N.J.A.C. 17:4-1.7(d). If the appeal before the PFRS 

Board of Trustees concerns only a legal determination, as is the 

case in most of the appeals we decide here, "the Board may 

retain the matter and issue a final administrative determination 

which shall include detailed findings of fact and conclusions of 

law based upon the documents, submissions and legal arguments of 

the parties." N.J.A.C. 17:4-1.7(e). Once the PFRS Board of 

Trustees reaches a final determination, the affected PFRS member 
43 A-0083-11T2

has the right to appeal to the Superior Court, Appellate 

Division. Ibid. 

The Acting Director has not cited any authority to support 

taking the unprecedented action of conducting a de novo review 

of the PFRS Board of Trustees' final determinations of the cases 

we review here, and thereafter refusing to implement the Board's 

final determination. Our own independent research has also 

failed to find any authority to support the Acting Director's 

action.16

 

16 Indeed, the Division of Pensions and Benefits' own website 

states: The "general responsibility for the operation of the 

PFRS is vested in the Board of Trustees under the provisions of 

N.J.S.A. 43:16A-13." For those interested in submitting an 

application to be considered for appointment to the PFRS Board 

of Trustees, the Division provides the following description of 

the responsibilities of the PFRS Board:

Render determinations regarding Disability 

retirement cases.

Review appeals pertaining to the 

disallowance of pension benefits.

Adopt rules and regulations to provide for 

the payment of benefits and collection of 

monies as required by the statute.

Establish rules and regulations within the 

limitations of statutes and opinions of the 

Courts and the Attorney General, designed to 

prevent injustices and inequities that may 

arise in the operation of the Retirement 

System.

(continued)
44 A-0083-11T2

The Attorney General has responded in these appeals on 

behalf of the Acting Director. In that capacity, the Attorney 

General has questioned whether this court has the authority to 

compel the Division to abide by the PFRS Board of Trustees'

final decision in these cases. The Attorney General argues that 

mandamus relief "is only appropriate where the party seeks to 

compel a governmental agency to perform a 'duty [that] is 

ministerial and wholly free from doubt' or 'to compel the 

exercise of discretion, but not in a specific manner.'" Twp. of 

Neptune v. State, Dep't of Envtl. Prot., 425 N.J. Super. 422, 

434 (App. Div. 2012) (citing Loigman v. Twp. Comm. of 

Middletown, 297 N.J. Super. 287, 299 (App. Div. 1997)).

 

(continued)

Resolve individual questions on the merits 

of each case in terms of statutes, opinions 

of the Attorney General, advice of the 

Actuary and cases cited by counsel as 

deliberated by the Courts.

View monthly and annual reports setting 

forth data such as assets and liabilities, 

income and disbursements and statistical 

summarization of membership as documented by 

the Actuary. 

[Division of Pensions and Benefits, 

http://www.state.nj.us/treasury/pensions/boa

rd_results.shtml#pfrs (last visited Mar. 8, 

2015).] 
45 A-0083-11T2

Following this line of reasoning, the Attorney General 

attempts to justify the unprecedented action taken by the Acting 

Director in these cases by advancing the following argument:

While N.J.A.C. 17:4-4.1(d) and N.J.A.C.

17:1-7.3 direct the Division to report any 

suspected violations to the Board, nothing 

in the legislative and regulatory scheme 

compels the Division to accept "claims for 

benefits" that clearly offend the statute. 

Indeed, "administrative agencies are . . . 

charged under the State constitution with 

the responsibility of faithfully executing 

the laws." In re Appeal of Certain Sections 

of the Uniform Admin. Procedure Rules, 90 

N.J. 85, 92-93 (1982) (citing N.J. Const.

art. V, § 1, ¶ 11).

The Attorney General's position on behalf of the Acting 

Director disregards that the Legislature unambiguously "vested"

the PFRS Board of Trustees with "the general responsibility for 

the proper operation of the retirement system[.]" N.J.S.A.

43:16A-13(a)(1). As discussed in great detail infra, the 

composition of the PFRS Board of Trustees reveals the 

Legislature's intent to devise an administrative quasi-judicial 

body composed predominantly of private citizens. The men and 

women who serve as trustees on the PFRS Board are required to 

take an oath that they will discharge their responsibilities and 

exercise their legal authority "diligently and honestly," and 

"will not knowingly violate or willingly permit to be violated 

any of the provisions of the law applicable to the retirement 
46 A-0083-11T2

system." N.J.S.A. 43:16A-13(a)(3). In the regulatory system 

devised to implement this legislative mandate, the PFRS Board of 

Trustees has the exclusive authority to "question the 

compensation of any member or retiree to determine its 

credibility where there is evidence that compensation reported 

as base salary may include extra compensation." N.J.A.C. 17:4-

4.1(b).

The Acting Director's refusal to implement the final 

decision of the PFRS Board of Trustees is untethered to any 

statutory or regulatory authority. This unprecedented ad hoc 

approach adopted by the Acting Director in these cases 

undermines the complimentary role the Division is obligated to 

play by providing the staffing support necessary to enable the 

PFRS Board of Trustees to carry out its role as the final 

administrative arbiter of what constitutes creditable 

compensation for purposes of pension benefits. N.J.A.C. 17:4-

4.1(d); N.J.A.C. 17:1-7.3(b).

The PFRS Board of Trustees has acted as the final arbiter 

in these matters consistently since its creation by the 

Legislature. "[T]he fact that the Legislature has not acted in 

response to an agency's interpretation or practice is 'granted 

great weight as evidence of its conformity with the legislative 

intent.'" Klumb v. Bd. of Educ. of Manalapan-Englishtown Reg'l 
47 A-0083-11T2

High Sch. Dist., Monmouth Cnty., 199 N.J. 14, 24-25 (2009) 

(quoting Malone v. Fender, 80 N.J. 129, 137 (1979)).

We also question the role the Attorney General has played 

in these appeals. In our view, the position the Attorney 

General adopted in Gladden v. Board of Trustees of the PERS, 171 

N.J. Super. 363 (App. Div. 1979), should have been followed in 

these cases. In Gladden, a World War II veteran who had served 

for many years in our State's Legislature applied for enrollment 

in the Public Employees' Retirement System in May 1977. Id. at 

366-67. The Attorney General advised the PERS Board "that under 

the governing statutes[,]" based on the appellant's "continuous 

permanent employment in the Legislature" and his status as a 

veteran, the PERS Board was "mandatorily required" to enroll the 

appellant in the PERS, retroactive to 1958. Id. at 367. 

The PERS Board steadfastly disregarded the Attorney 

General's legal opinion and refused to enroll the appellant into 

the PERS based on its interpretation of one of its own 

regulations. Ibid. The PERS Board notified the appellant of 

its decision, "indicating that the decision was final and could 

be appealed to the Appellate Division." Ibid. Thereafter, the 

Attorney General requested the PERS Board "to reconsider its 

decision." Unfortunately, the PERS Board remained defiant and 
48 A-0083-11T2

"denied the Attorney General's request for a reconsideration." 

Ibid.

The appellant in Gladden appealed to this court. The PERS 

Board asked the Attorney General to represent its interests 

before this court. In response, 

the Attorney General reiterated to the Board 

that the issue involved was purely one of 

construction of the governing statutes; that 

the Attorney General's opinion on the legal 

issue was patently correct and binding on 

the Board, and that there was no arguable 

basis upon which the Board's decision could 

be defended in court. Accordingly, the 

Board was advised that the Attorney General 

would not provide it with legal 

representation in the courts at public 

expense and that a motion to intervene in 

support of the Attorney General's opinion 

would be filed.

[Ibid.]

The PERS Board in Gladden retained private counsel and 

filed an appeal from the Attorney General's "decision not to 

afford representation to the [PERS] Board." Id. at 368. The 

Attorney General moved to intervene on his own behalf as an 

appellant. Ibid. Ultimately, we granted the Attorney General's 

motion for leave to participate as amicus curiae, "permitted the 

individual members of the [PERS] Board to intervene on their own 

behalf," and denied the motions filed by the PERS Board's 

privately retained law firm to designate it as "special counsel"

to the PERS Board and order the State to pay its legal fees in 
49 A-0083-11T2

connection with the appeal. Ibid. The Supreme Court denied the 

PERS Board's privately retained motions for leave to appeal our 

decisions. Ibid.

After deciding this flurry of motions, we reached the 

following decision:

There can be no question that a refusal of a 

state agency to abide by a valid state law 

is a fundamental concern of the Attorney 

General both in his capacity and

responsibility as adviser to the agency and 

in his capacity and responsibility as 

protector of the public. Since the efforts 

of the Attorney General informally to 

convince the Board to abide by the statutory 

scheme and grant appellant's mandatory 

enrollment have met with not only 

unacceptance but defiance, the Attorney 

General has appeared "to preserve his 

function and responsibility and to protect 

the public from arbitrary and illegal 

action."

[Id. at 368-69 (emphasis added).]

Here, by contrast, the Attorney General has not asserted he 

made any efforts, informal or otherwise, to advise the PFRS 

Board of Trustees that its decisions with respect to what 

constitutes creditable compensation for pension purposes under 

N.J.S.A. 43:16A-1(26)(a) were legally incorrect and that there 

was no arguable basis upon which the PFRS Board's decisions 

could be defended in court. As we noted in Gladden, whether a 

state agency is abiding by a valid state law "is a fundamental 

concern of the Attorney General both in his capacity and 
50 A-0083-11T2

responsibility as adviser to the agency and in his capacity and 

responsibility as protector of the public." Ibid. Had the 

record in these appeals contained evidence of: (1) the Attorney 

General's efforts to advise the PFRS Board of Trustees of the 

proper legal interpretation of creditable compensation for 

pension purposes under N.J.S.A. 43:16A-1(26)(a), and (2) the 

PFRS Board of Trustees' defiant refusal to abide by the Attorney 

General's opinion, the proper action should have been for the 

Attorney General to petition this court under Gladden to compel 

the PFRS Board of Trustees to abide by the Attorney General's 

legal opinion.

Instead, the Attorney General decided to represent and 

defend the legally untenable actions of the Acting Director to 

unilaterally refuse to implement the final decisions of the PFRS 

Board of Trustees. This approach is both legally unsupportable 

and completely unnecessary because it promotes ultra vires, 

self-help actions by the Acting Director and overlooks the 

lawful path the Attorney General could have followed under 

Gladden.

The Legislature placed the Division of Pension and Benefits 

within the Treasury Department and appointed the State Treasurer 

or the deputy State Treasurer as a permanent member of the PFRS 

Board of Trustees. N.J.S.A. 43:16A-13(a)(2)(b). Considering 
51 A-0083-11T2

the five public members who are appointed by the Governor, 

N.J.S.A. 43:16A-13(a)(2)(a), the Legislature structured the PFRS 

Board of Trustees in a manner that gives the Executive Branch a 

permanent majority of six presumably "disinterested" members on 

this eleven-member Board. Although the PFRS Board of Trustees 

can function and transact business with six members present, 

N.J.S.A. 43:16A-13(d)(6), there is no basis to presume the 

multiple permutations of the makeup of any six-member majority 

will necessary favor any particular point of view. Thus, as 

matter of fact, the composition of the PFRS Board of Trustees 

does not favor those most affected by its decisions.

However, we do not mean to suggest or imply there are valid 

reasons to question the objectivity or impartiality of the 

remaining five members of the PFRS Board of Trustees, merely 

because they are selected from the ranks of police officers and 

firefighters. We presume all of the members of the PFRS Board 

of Trustees will carry out their duties and obligations 

faithfully, impartially, and according to law, regardless of how 

they are selected. In fact, this court has a longstanding,

well-established view that citizens who serve on these pension 

boards

are fiduciaries and therefore have a duty to 

protect the fund and the interests of all 

beneficiaries thereof. They must exercise 

due care, diligence and skill in 
52 A-0083-11T2

administering the trust. . . . It would not 

serve the statutory policy to pay out moneys 

to those not entitled thereto.

[Mount v. Trs. of Pub. Emps.' Ret. Sys., 133 

N.J. Super. 72, 86 (App. Div. 1975). See 

also Francois v. Bd. of Trs., 415 N.J. 

Super. 335, 357 (App. Div. 2010); Smith v. 

State, Dep't of Treasury, Div. of Pensions & 

Benefits, 390 N.J. Super. 209, 215 (App. 

Div. 2007); Fasolo v. Bd. of Trs., 190 N.J. 

Super. 573, 586 (App. Div. 1983).]

Indeed, the PFRS Board of Trustees has excluded longevity 

payments and other forms of individual salary adjustments after 

having determined, based on the record of the particular case, 

that the salary adjustments were granted primarily in 

anticipation of the employee's retirement and were not 

creditable for pension purposes as defined in N.J.S.A. 43:16A1(26) and N.J.A.C. 17:4-4.1. Wilson v. Bd. of Trs. of Police 

and Firemen's Ret. Sys., 322 N.J. Super. 477, 484 (App. Div. 

1998).

The system for administering the public pensions of police 

officers and firefighters was established with the primary 

objective of inducing

able persons to enter and remain in public 

employment, and to render faithful and 

efficient service while so employed. They 

are in the nature of compensation for 

services previously rendered and act as an 

inducement to continued and faithful 

service. Being remedial in character, 

statutes creating pensions should be 

liberally construed and administered in 
53 A-0083-11T2

favor of the persons intended to be 

benefited thereby.

[Geller v. Dep't of the Treasury of N.J., 53 

N.J. 591, 597-98 (1969) (citations 

omitted).]

We discern no basis to conclude that the composition of the 

PFRS Board of Trustees undermines this overarching public 

policy. The five municipalities and four unions decided to 

transcend their traditional roles as antagonists in labor 

matters and speak with one voice here, because the Acting 

Director's ultra vires actions to refuse to implement the final 

decisions of the PFRS Board of Trustees left them without any 

other alternative.

Left unaddressed by this court, the ad hoc, untenable 

actions taken by the Acting Director would have left this public 

pension in chaos, subject to the unfettered discretion of a 

self-appointed "Board overseer." Those most affected by the 

Acting Director's ultra vires actions, the thousands of retired 

and active duty police officers, firefighters, and their 

families, would have been left in bureaucratic limbo, unable to 

organize their financial affairs and rationally plan for their 

future needs. Even assuming the Acting Director acted in good 

faith to preserve the actuarial integrity of the pension system 

as she saw it, her powers to act in this fashion must be 

expressly conferred by the Legislature.
54 A-0083-11T2

The current composition of the PFRS Board of Trustees and 

the authority vested in it by the Legislature as the final arbiter

of what constitutes creditable compensation benefits as defined in

N.J.S.A. 43:16A-1(26)(a) or N.J.A.C. 17:4-4.1 is not new. It has

existed and functioned unchallenged heretofore for decades. Any 

perceived or actual structural bias in its composition is a 

matter for the Legislature to address. "The wisdom of a statute 

is not for the courts." Dacunzo v. Edgye, 19 N.J. 443, 454 

(1955). See also State ex rel. B.P.C., 421 N.J. Super. 329, 347 

(App. Div. 2011) ("Our role as a court is not to question the 

wisdom of legislative enactments, but to enforce them as long as 

they are not contrary to constitutional principles.").

Based on the record presented by the nine appellants and 

the authority the Legislature vested in the PFRS Board of 

Trustees, we hold the action of the Acting Director to refuse to 

implement a final determination made by the PFRS Board of 

Trustees concerning what constitutes creditable compensation for 

pension purposes under N.J.S.A. 43:16A-1(26)(a) in these cases 

was ultra vires, without legal force or effect. Final 

determinations of the PFRS Board of Trustees are reviewable only 

by this court. N.J.A.C. 17:4-1.7(e); R. 2:2-3(a)(2).

So Ordered.
_________________________________

ASHRAFI, J.A.D., concurring.

I concur in the court's judgment but write to point out a 

seeming incongruity in the process established by statute for

adjudicative decisions of the Board of Trustees of the Police 

and Firemen's Retirement System (PFRS). 

In these appeals, the Division of Pensions and Benefits 

(the Division) contends the appellant municipalities provide

accelerated longevity or seniority salary increments during the 

later service years of their police officers and firefighters

and those salary increments should not be credited toward 

calculating pension benefits. 

Under the PFRS, retirement benefits are typically available 

after a PFRS member reaches age fifty-five and has completed 

twenty years of service. N.J.S.A. 43:16A-5. The amount of 

pension benefits is based on the member's "final compensation." 

N.J.S.A. 43:16A-5(2)(b), (3). The term "final compensation" 

refers to the member's final year of service, N.J.S.A. 43:16A1(28)(a), or, alternatively for newer PFRS members, the average 

of the three highest years of salary during all service years, 

N.J.S.A. 43:16A-1(28)(b). The word "compensation," is defined 

by statute as "base salary . . . which is in accordance with 
2 A-0083-11T2

established salary policies of the member's employer for all 

employees in the same position . . . ." N.J.S.A. 43:16A-1(26). 

The statute specifically excludes "individual salary adjustments 

which are granted primarily in anticipation of the member's 

retirement . . . ." Ibid. 

In plainer English, the statutes provide that PFRS pension 

benefits are to be calculated using the member's legitimate 

final or highest base salary and not enhancements in 

compensation intended to increase the member's retirement 

benefits. 

The exclusion of atypical salary increases near the time of 

retirement "protect[s] the actuarial soundness of the pension 

fund by prohibiting the use of ad hoc salary increases intended 

to increase retirement allowances without adequate compensation 

to the [pension] fund . . . ." In re Puglisi, 186 N.J. 529, 534 

(2005) (internal quotation marks and citations omitted). 

According to the Division, the employing municipality and the 

employee do not contribute enough to the pension fund from 

short-term, pre-retirement salary increases to fund the higher 

pension benefits that will likely be payable over many years of 

retirement. 

In the appeals currently before us, the Division questioned 

accelerated salary increments granted by the appellant 
3 A-0083-11T2

municipalities after the PFRS members' twentieth year of 

service. For example, the Town of Harrison provides to its 

police officers an additional two-percent longevity increment 

every five years from completion of the fifth to the twentieth 

years of service. It then provides an additional two-percent 

increment at the start of the twenty-third year of service and 

yet one more two-percent increment at the start of the twentyfourth year. See ante at ___ (slip op. at 8). Thus, Harrison's 

longevity increments accelerate after the twentieth year, 

increasing by four percent in just three years and one day of 

additional service. Similarly, the City of Linden provides to 

some of its firefighters a $1,000 increment as "senior officer 

pay" beginning in the fourteenth year of service. It then 

provides another $1,750 beginning in the twenty-first year and 

still an additional $2,250 beginning in the twenty-fourth year 

of service. See ante at ___ (slip op. at 19). The Division 

took the position that these later increments are granted in 

anticipation of the retirement of police officers and 

firefighters and should not increase their pension benefits.

 The unions that represent the PFRS members and the 

municipalities that negotiated those contract terms presented 

arguments and information to the PFRS Board of Trustees in 

opposition to the Division's position. The Board then ruled
4 A-0083-11T2

that the salary increments in dispute were not granted to 

enhance retirement benefits and should be included in 

calculating the pensions of retiring police officers and 

firefighters. The Acting Director of the Division disagreed 

with those rulings and declined to implement them. The court 

holds today that the Acting Director was not authorized by the 

Legislature to overrule the PFRS Board of Trustees. I agree 

with that holding. 

The court reaches no conclusion on the merits of the 

dispute, that is, whether the disputed longevity and seniority 

increments are consistent with the statutory definition of 

"compensation" or are "individual salary adjustments . . . 

primarily in anticipation of . . . retirement," N.J.S.A. 43:16A1(26). See ante at ___ (slip op. at 4). I, too, reach no 

conclusion on the merits of the dispute, noting as well that 

these appeals provide an inadequate factual record from which we 

might have decided the issue had it been properly before us.1 

 

1 As far as I can tell, the record before the PFRS Board of 

Trustees did not include information such as what the actuarial 

costs of the increments are to the PFRS pension fund and, most 

important, how frequently and quickly members retire after 

receiving the increments. It might have been relevant to 

consider whether the accelerated longevity and seniority 

increments help the municipalities retain in active employment

their highly-experienced police officers and firefighters or 

whether the increments simply increase "final compensation" 

(continued)
5 A-0083-11T2

My present concern is with the disparity in the 

administrative and judicial review process of such decisions by

the PFRS Board of Trustees. It seems that an appeal can be 

taken only when the Board decides a matter against the interests 

of a PFRS member. See N.J.A.C. 17:4-1.7. In that circumstance, 

the member has a right to appeal the adverse decision to this 

court under Rule 2:2-3(a)(2). However, if the decision of the 

PFRS Board favors the member, there seems to be no interested 

party who has a right to appeal. The employer municipality is 

not an interested adverse party because it negotiated the 

increments and is not itself responsible for paying the 

increased pension benefits during the members' years of 

retirement. 

As these appeals illustrate, five municipalities and four 

unions joined together and "speak with one voice," ante at ___ 

(slip op. at 4), in challenging the decisions of the Acting 

Director. Not only are the municipalities bound by the 

collective bargaining agreements they negotiated but they have a 

financial interest in the enforcement of those agreements. The 

municipalities pay the salary increments out of their own 

coffers for a limited number of years until the police officer 

 

(continued)

shortly before retirement of most officers and firefighters who 

are eligible to retire. 
6 A-0083-11T2

or firefighter retires. Then the burden falls on the PFRS to 

pay the increased pension benefits for all the years of 

retirement. 

By negotiating terms that provide favorable retirement 

benefits to their employees, the municipalities might obtain 

concessions in other areas of negotiations that benefit the 

municipalities financially. In Board of Trustees of the 

Teachers Pension and Annuity Fund of New Jersey v. La Tronica, 

81 N.J. Super. 461, 471 (App. Div. 1963), certif. denied, 41 

N.J. 587 (1964), we described unusual salary arrangements in the 

final years of a public employee's active employment as the 

local employer's "grand gesture of farewell at little expense."

In these cases, the Acting Director claims she refused to 

implement the PFRS Board's decisions to protect the viability of 

the pension fund for all PFRS members. It seems, however, that 

the Legislature has afforded her, and the Executive Branch of 

State government, no right to review the PFRS Board's decisions 

or to appeal to this court. 

This court's decision today explains the statutory and 

regulatory provisions that establish the Division's and the PFRS 

Board's relative authority in addressing the matters in dispute. 

The Division's primary function is administrative. N.J.S.A.

43:16A-13(a)(8). It also has an investigatory and referral 
7 A-0083-11T2

function when it detects salary enhancements that may be 

contrary to the statutory definition of "compensation," N.J.A.C.

17:4-4.1(d), but it does not have adjudicatory responsibilities 

or authority in determining what compensation should be credited 

for purposes of calculating a member's pension rights. 

The court today holds that the Legislature has placed the 

adjudicative function and authority exclusively with the PFRS 

Board of Trustees. Ante at ___ (slip op. at 46). I am not as 

certain as my colleagues that the Board's adjudicative authority 

is exclusive, but I agree that no statute, regulation, or case 

law cited to us grants the Acting Director power to review the 

Board's decisions. See N.J.S.A. 43:16A-13(a)(1) ("the general 

responsibility for the proper operation of the retirement system 

is hereby vested in a board of trustees . . . ."); N.J.A.C.

17:4-1.7 (setting forth procedures for a member's appeal to the 

PFRS Board of Trustees); Hemsey v. Bd. of Trs., Police & 

Firemen's Ret. Sys., 198 N.J. 215, 220-22 (2009) (final 

administrative decision issued by Board of Trustees); see also 

Sellers v. Bd. of Trs. of the Police & Firemen's Ret. Sys., 399 

N.J. Super. 51, 62 (App. Div. 2008) (Decision-making powers of 

PFRS Board of Trustees include authority "to apply equitable 
8 A-0083-11T2

principles to provide a remedy when justice so demands, provided 

the power is used rarely and sparingly . . . .").2 

While full adjudicative authority placed in such a board 

may not be unusual, the Board of Trustees in this case is not 

entirely under the control of the Executive and Legislative 

Branches of State government. The eleven-person Board consists 

of five positions that are reserved for and elected solely by 

active or retired police officers and firefighters who are 

members of PFRS. N.J.S.A. 43:16A-13(a)(2)(c), (d); N.J.A.C.

17:4-1.4(b). Those five Board members may be adjudicating a 

dispute about salary provisions that are the same as ones from 

which they themselves benefit financially. 

In comparison, persons with similar conflicts of interest 

would likely be excused for cause from serving on a jury that 

was asked to decide the issue, although jurors too take an oath 

to render a fair and impartial decision. See N.J.S.A. 2B:23-6. 

I do not mean that a jury and an administrative board are the 

same kind of adjudicative body. I use the analogy as an 

illustration of the impartiality we expect in governmental 

 

2 The Division does not argue that the Acting Director is the 

"head of the agency" who, under the provisions of the 

Administrative Procedures Act, N.J.S.A. 52:14B-1 to -15, must 

issue a final agency decision in a contested pension benefits 

case, N.J.S.A. 52:14B-10. Also, the Division has not cited 

N.J.S.A. 52:14B-8 as supporting a declaratory ruling of the 

Acting Director with respect to the disputed salary provisions. 
9 A-0083-11T2

adjudication of factual disputes. Nor are my comments intended 

to criticize the membership of the PFRS Board of Trustees. I do 

not denigrate the integrity and good faith of the police and 

firefighter members of the PFRS Board of Trustees any more than 

a trial judge denigrates the integrity and good faith of a 

potential juror who is excused from a case. 

Whatever the Board's membership may be, my comments are 

primarily directed to the absence of administrative and judicial 

review of its decisions when they are favorable to the PFRS 

member. If such decisions of the Board are final and the 

Director of the Division has no power to review them 

administratively or to decline to implement them, then the 

Executive Branch is seemingly without recourse in protecting the 

pension fund against a legally erroneous or skewed ruling of the 

Board. 

The court's decision today explains the unusual procedural 

steps taken by the State Attorney General after a disagreement 

with the Board of Trustees of a similar public employees' 

pension fund. See Gladden v. Bd. of Trs. of the Pub. Employees' 

Ret. Sys., 171 N.J. Super. 363, 367-68 (App. Div. 1979). The 

court suggests that the Attorney General could similarly have 

advised the PFRS Board in these cases that its actions are 

contrary to law and then pursued a remedy in this court if the 
10 A-0083-11T2

Board refused to heed the Attorney General's advice. Ante at 

___ (slip op. at 49-50). 

The Gladden decision, however, only came before this court 

for judicial review because the Board of Trustees in that case 

decided the matter against the interests of the prospective 

member of the pension fund, Gladden, and he filed the appeal. 

Gladden, supra, 171 N.J. Super. at 367. Had the Board's 

decision been in favor of Gladden, there would have been no 

appeal and no judicial case in which the Attorney General could 

have intervened to resolve a disagreement with the Board's 

decision. In the absence of an appeal by a party that has the 

right to appeal, I am unable to identify what procedural 

mechanism the Attorney General might have employed to make a 

direct application to this court, which is not normally a court 

of original jurisdiction. See R. 2:10-5 ("The appellate court 

may exercise such original jurisdiction as is necessary to the 

complete determination of any matter on review.").

I also question the lack of any record in these cases 

stating the reasons supporting the final rulings of the PFRS 

Board of Trustees. The Division and the Board explained their

determinations when initially deciding these matters against the 

interests of PFRS members. But the Board's subsequent rulings 

in favor of PFRS members consist only of terse letters from the 
11 A-0083-11T2

Board secretary stating the result without further explanation. 

Not even a tally of the Board's vote is provided. 

As the Legislature has devised the PFRS and its Board of 

Trustees, there seems to be no opportunity for judicial review 

when the PFRS member obtains a favorable decision from the PFRS 

Board of Trustees and when the pension fund is thus obligated to 

pay a higher pension. While that result may not be different 

from the procedures applicable to other adjudicative boards,

these cases seem to differ in that the Governor and the 

Legislative Branch have only partial control of appointments to 

the PFRS Board of Trustees, see N.J.S.A. 43:16A-13(a)(2). 

Consequently, the PFRS Board of Trustees seems to have powers 

beyond that of other adjudicative boards within our State system 

of governance.

I concur in the court's judgment because I agree that 

the applicable statutes and regulations do not authorize the 

Acting Director effectively to overrule decisions made by the 

PFRS Board of Trustees by declining to implement them.