SUPERIOR COURT OF NEW JERSEY 

 APPELLATE DIVISION 

 DOCKET NO. A-2314-22 

RICHARD WASSERMAN, 

 Petitioner-Appellant, 

v.

BOARD OF TRUSTEES OF

THE TEACHERS' PENSION 

AND ANNUITY FUND, 

 Respondent-Respondent. 

__________________________ 

Argued April 24, 2024 – Decided May 16, 2024 

Before Judges Susswein and Vanek. 

On appeal from the Board of Trustees of the Teachers' 

Pension and Annuity Fund, Department of the 

Treasury, Agency Docket No. TPAF No. xx4397.

Albert J. Leonardo argued the cause for appellant 

(Zazzali PC, attorneys; Albert J. Leonardo, of counsel 

and on the briefs). 

Payal Y. Ved, Deputy Attorney General, argued the 

cause for respondent (Matthew J. Platkin, Attorney 

General, attorney; Janet Greenberg Cohen, Assistant

NOT FOR PUBLICATION WITHOUT THE 

APPROVAL OF THE APPELLATE DIVISION 

This opinion shall not "constitute precedent or be binding upon any court." Although it is posted on the 

internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.
2 A-2314-22

Attorney General, of counsel; Payal Y. Ved, on the 

brief). 

PER CURIAM 

Petitioner Richard Wasserman appeals a March 10, 2023 final 

administrative determination by respondent, the Board of Trustees (the Board) 

of the Teachers' Pension and Annuity Fund (the TPAF), denying his request for 

the bi-weekly military stipend paid to him by the federal government through 

his present employer, the Paterson School District (District), to be deemed 

TPAF pension-creditable compensation. After careful review of the record and 

prevailing New Jersey law, we affirm the Board's final determination. 

I.

 We recount the salient facts in the record before us. On July 16, 2018, 

Wasserman was hired by the District for a "Teacher Military Science" position 

at John F. Kennedy High School (JFK School) in the School of Architecture and 

Construction Trade. The employment contract for the 2018-19 school year fixed 

the annual salary at $59,105. 

At the JFK School, Wasserman taught at least five class periods per day 

in addition to managing the school's Junior Reserve Officers' Training Corps 

(JROTC) unit. His duties were specified in a written job description and 

included administering the JROTC summer leadership camp; coordinating with 
3 A-2314-22

senior school officials in establishing operating procedures relating to the 

administration, control, and training of JROTC cadets; and conducting public 

affairs efforts. Wasserman's job description specified that he was to direct and 

participate in "service learning and community service events" including 

weekend duties, as applicable. He was also required to establish and maintain 

at least two integrated or extracurricular teams such as drill team, color guard, 

and raider team. The "environmental demands" section of Wasserman's job 

description stated he was required to attend off-site training events. 

A collective negotiations agreement (CNA) between the Paterson 

Education Association (PEA) and the District set forth compensation ranges 

should the District decide to augment an employee's salary for assisting with 

certain extracurricular activities. The CNA's salary range for approved JROTC 

extracurricular activities spanned from $6,262 to $7,829 per year.1 Wasserman 

did not receive additional pay under the salary schedule for any extracurricular 

activities or additional duties. 

The federal government controls the amount JROTC instructors are paid 

pursuant to 10 U.S.C. § 2031(d). For Wasserman's first year of employment, 

the District was advised by the federal government his required minimum 

1

 The guide provided in the appendix was for the 2016-17 school year. 
4 A-2314-22

instructor pay (MIP) was $94,605.90 based on his U.S. Army service time and 

rank. The District was required to certify Wasserman's JROTC employment 

every year by submitting an Annual Certification of Pay and Data Form. 

The federal government remitted funds to the District for the difference 

between Wasserman's contractual salary and the required $9,460.59 MIP. Those 

federal funds were then distributed by the District to Wasserman as a military 

stipend. Wasserman received two separate bi-weekly paychecks from the 

District, which were individually designated on each check as "military stipend" 

and "regular earnings." The District only deducted TPAF pension contributions 

from Wasserman's regular earnings. No pension deductions were taken from 

Wasserman's miliary stipend. The District issued Wasserman W-2 forms for the 

2019 and 2020 tax years which set forth the annual income paid to him as 

$105,332.46 and $105,576.90, respectively. 

 On February 14, 2020, Wasserman requested the State of New Jersey, 

Department of the Treasury, Division of Pension and Benefits (the State) 

conduct an audit to determine why only half of his salary was subject to pension 

contributions stating: 

Paterson has paid one-half of [Wasserman's] salary and the 

United States Army has paid one-half of his salary. As 

such, [Wasserman] receives two paychecks on each 

payroll date. . . . The portion of [Wasserman's] salary paid 
5 A-2314-22

by the Army is not for any additional work beyond his 

teaching duties and is thus not a stipend. As such, 

[Wasserman's] entire salary should be reported by the 

District to the [State] and should be subject to pension 

contributions. 

 On May 6, 2021, the State responded and advised the District correctly 

reported Wasserman's salary for the 2018-19, 2019-20, and 2020-21 school years 

since any supplementary salary paid to him by the federal government was additional 

compensation beyond his contractual salary and was not pensionable under N.J.S.A. 

18A:66-2(d)(1) and N.J.A.C. 17:3-4.1 (2015). On June 15, 2021, Wasserman 

appealed the State's determination and the matter was transferred to the Office of 

Administrative Law (OAL) for a contested hearing. 

On July 12, 2022, the OAL held a hearing at which Wasserman testified and 

various documents were moved into evidence. On December 16, 2022, the 

Administrative Law Judge (ALJ) issued an initial decision concluding 

"notwithstanding the absence of a salary guide specific to JROTC instructors, 

Wasserman's 'compensation' under N.J.S.A. 18A:66-1 . . . was the MIP." The ALJ 

found that although Wasserman's military stipend was paid through a separate check, 

it was part of his regular bi-weekly compensation and represented payment for duties 

not addressed in Wasserman's base compensation, but which were integral to the 
6 A-2314-22

effective functioning of his position. Therefore, the ALJ concluded Wasserman's 

military stipend was pension creditable. 

At its meeting on February 2, 2023, the Board rejected the ALJ's initial 

decision and reaffirmed its decision denying Wasserman's request for his military 

stipend to be deemed pension creditable. On March 10, 2023, the Board confirmed 

this determination in a final administrative decision. The Board found Wasserman 

was hired by the District under a salary contract and any compensation received 

beyond the contractually designated amount was considered extra compensation and 

not pension creditable pursuant to N.J.A.C. 17:3-4.1(a)(1)(x) (2015). The Board 

also relied on N.J.A.C. 17:3-4.1(j) (2015), which provides stipends can be deemed 

pension creditable only when they are included as part of a regular payroll check. 

Since Wasserman received two separate checks, the Board found the military stipend 

was not creditable towards his pension pursuant to N.J.A.C. 17:3-4.1(j) (2015). This 

appeal follows. 

II.

On appeal, Wasserman argues the Board's March 10, 2023 final 

administrative decision should be reversed and we should deem the entirety of 

his MIP to be pension-creditable compensation under N.J.A.C. 17:3-4.1(j) 

(2015) because all of his JROTC functions were regular contractual job duties. 
7 A-2314-22

Wasserman argues pursuant to N.J.S.A. 52:14B-10(c), the Board erroneously 

rejected certain of the ALJ's findings of fact. 

Substantial deference is given to "the agency charged with enforcing an 

act." Merin v. Maglaki, 126 N.J. 430, 436-37 (1992). "The agency's 

interpretation will prevail provided it is not plainly unreasonable." Id. at 437. 

Thus, we "review[] agency decisions under an arbitrary and capricious 

standard." Zimmerman v. Sussex Cnty. Educ. Servs. Comm'n, 237 N.J. 465, 

475 (2019). "An administrative agency's final quasi-judicial decision will be 

sustained unless there is a clear showing that it is arbitrary, capricious, or 

unreasonable, or that it lacks fair support in the record." In re Herrmann, 192 

N.J. 19, 27-28 (2007); see also Saccone v. Bd. of Trs. of the Police & Firemen's

Ret. Sys., 219 N.J. 369, 380 (2014) (quoting Russo v. Bd. of Trs., Police & 

Firemen's Ret. Sys., 206 N.J. 14, 27 (2011)). The party challenging the 

administrative action bears the burden of making this showing. Lavezzi v. State, 

219 N.J. 163, 171 (2014). 

The factual "findings of an ALJ 'are considered binding on appeal, when 

supported by adequate, substantial and credible evidence.'" Oceanside Charter 

Sch. v. N.J. State Dep't of Educ., 418 N.J. Super. 1, 9 (App. Div. 2011) (quoting 

In re Taylor, 158 N.J. 644, 656 (1999)). "Although we review administrative 
8 A-2314-22

decisions with a deferential standard of review, 'a reviewing court is in no way 

bound by [an] agency's interpretation of a statute or its determination of a strictly 

legal issue.'" State Shorthand Reporting Servs. v. N.J. Dep't of Lab. & 

Workforce Dev., 478 N.J. Super. 13, 20-21 (App. Div. 2024) (alteration in 

original) (quoting Allstars Auto Grp., Inc. v. N.J. Motor Vehicle Comm'n, 234 

N.J. 150, 158 (2018)). "'[If] an agency's determination . . . is a legal 

determination, the appellate court's review is de novo.'" Id. at 21 (alteration in 

original) (quoting K.K. v. Div. of Med. Assistance & Health Servs., 453 N.J. 

Super. 157, 161 (App. Div. 2018)). 

III.

Wasserman's MIP is paid to him by the federal government through the 

District pursuant to 10 U.S.C. § 2031(d) (2022) (amended Dec. 22, 2023), which 

stated in pertinent part 

[T]he Secretary of the military department . . . may 

authorize qualified institutions to employ, as 

administrators and instructors in the program, retired 

officers and noncommissioned officers . . . whose 

qualifications are approved by the Secretary and the 

institution concerned and who request such 

employment, subject to the following: 

(1) A retired member so employed is entitled to 

receive the member's retired or retainer pay 

without reduction by reason of any additional 

amount paid to the member by the institution 
9 A-2314-22

concerned. In the case of payment of any such 

additional amount by the institution concerned, 

the Secretary of the military department 

concerned shall pay to that institution the amount 

equal to one-half of the amount paid to the retired

member by the institution for any period . . . . 

The statutory and regulatory framework governing teachers' pensions 

under New Jersey law sets forth what amounts are pension-creditable 

compensation. N.J.S.A. 18A:66-2(d)(1) specifies that creditable compensation 

is

the contractual salary, for services as a teacher as 

defined in this article, which is in accordance with 

established salary policies of the member's employer 

for all employees in the same position but shall not 

include individual salary adjustments which are granted 

primarily in anticipation of the member's retirement or 

additional remuneration for performing temporary or

extracurricular duties beyond the regular school day or 

the regular school year. 

 Furthermore, N.J.A.C. 17:3-4.1 (2015) (amended May 1, 2023) 

stated 

(a) The compensation of a member subject to pension

and group life insurance contributions and creditable 

for retirement and death benefits in the Fund shall be 

limited to base salary, and shall not include extra

compensation. 

1. Forms of compensation that have been identified

as extra compensation include, but are not limited 

to:
10 A-2314-22

. . . . 

xix. Compensation paid for additional services 

performed during a normal duty assignment, 

which are not included in base salary. 

. . . . 

(c) Extra compensation shall not be considered 

creditable for benefits and all employee contributions 

made thereon shall be returned without interest. 

N.J.A.C. 17:3-4.1(j) (2015) specifically addresses stipends and states: 

The Board may consider a stipend as creditable 

compensation and subject to pension deductions for 

retirement credit, if it: 

1. Is included as part of the petitioner's regular 

payroll check; and 

2. Represents duties not addressed in base 

compensation that are integral to the effective 

functioning of the member's contracted position. 

We find no error in the Board's final determination that Wasserman's 

military stipend is not pension-creditable compensation based on the governing 

New Jersey statute and administrative code provisions. "'To determine the 

Legislature's intent, [courts] look to the statute's language and give those terms 

their plain and ordinary meaning,' because 'the best indicator of that intent is the 

plain language chosen by the Legislature.'" State v. J.V., 242 N.J. 432, 442 
11 A-2314-22

(2020) (first quoting DiProspero v. Penn, 183 N.J. 477, 492 (2005); and then 

quoting Johnson v. Roselle EZ Quick LLC, 226 N.J. 370, 386 (2016)). 

Accordingly, if the language is clear as to the application of the statute, there 

need be no further interpretation undertaken by the courts. In re Expungement 

Application of D.J.B., 216 N.J. 433, 440 (2014). 

The plain language of N.J.S.A. 18A:66-2(d)(1) defines pension-creditable 

compensation as "the contractual salary, for services as a teacher as defined in 

this article." Additionally, under N.J.A.C. 17:3-4.1 (2015) only a member's base 

salary shall be subject to pension contributions. Wasserman's contractual base 

salary is $59,105. Thus, according to the governing statute and the applicable 

administrative code provision, only Wasserman's base salary is subject to 

pension credit. 

Wasserman argued and the ALJ found that Lyle v. Commissioner, 76 T.C. 

668, 675 (1981), was a non-binding federal tax court case which is inapplicable 

to this matter. We find no error in the Board's reliance on the general language 

in Lyle reiterating that under 10 U.S.C. § 2031(d)(1) (2022) "employing 

educational institution[s] [are] free to determine the []schedule of pay" and "that 

they must pay the instructors the full 'additional amount' specified in the statute." 

Id. at 674. Nor do we find error in the Board's conclusion that our decision in 
12 A-2314-22

Siri v. Bd. of Trs. of the Tchrs' Pension and Annuity Fund, 262 N.J. Super. 147 

(App Div. 1993), is distinguishable since, in that decision, we did not address 

the creditability of a federally funded stipend to a State pension. 

Wasserman argues in the alternative that the ALJ properly found N.J.A.C. 

17:3-4.1(j) (2015) operated to deem his military stipend pensionable. We are 

unconvinced and find no error in the Board's determination that both prongs of 

N.J.A.C. 17:3-4.1(j) (2015) were not satisfied. We reject Wasserman's 

alternative argument his military stipend is pension creditable because he is 

being paid for duties not included in his base compensation but are integral to 

the effective functioning of his contractual position as a military science teacher. 

The record establishes Wasserman's job description requires him to perform 

JROTC duties that occur outside of normal business hours. Thus, Wasserman 

is already contractually compensated for those after-hours duties through his 

base salary. 

Our analysis is unchanged even if we were to find that the military stipend 

was intended to compensate Wasserman for duties not addressed in his base 

compensation but integral to his contracted position. Wasserman does not 

satisfy the first subsection of N.J.A.C. 17:3-4.1(j) (2015), which requires 

payment of the stipend and regular earnings in the same check in order to be 
13 A-2314-22

considered pensionable. It is undisputed the District issues two separate biweekly paychecks to Wasserman, one designated "regular earnings" and one 

labeled "military stipend." Therefore, in this instance, N.J.A.C. 17:3-4.1 (2015) 

cannot be applied to transform the military stipend paid by the federal 

government into TPAF pension-creditable compensation. 

IV. 

 We briefly address Wasserman's argument the Board improperly rejected 

the ALJ's factual finding that his prior employer, the Jersey City Public School 

District (Jersey City), considered the military stipend remitted to him as pension 

creditable. 

 "When an ALJ has made factual findings by evaluating the credibility of 

lay witnesses, the Pension Board may no longer sift through the record anew to 

make its own decision, which will be affirmed if it is independently supported 

by credible evidence." Cavalieri v. Bd. of Trs. of Pub. Emps. Ret. Sys., 368 N.J. 

Super. 527, 534 (App. Div. 2004). "[I]n order to reverse such a factual finding 

by an ALJ, the agency head must explain why the ALJ's decision was not 

supported by sufficient credible evidence or was otherwise arbitrary." Ibid. 

(citing N.J.S.A. 52:14B-10(c)). 
14 A-2314-22

 The record before the ALJ established Wasserman worked for Jersey City 

as a JROTC instructor before his employment by the District. During the OAL 

hearing, only Wasserman testified he received pension credit for his military 

stipend while employed by Jersey City. 

 The Board rejected the ALJ's factual finding and its legal import by

stating: 

The Board rejects the finding that [Wasserman's] full 

salary from Jersey City, including a military stipend, 

was credited to his TPAF account for pension purposes 

due to the self-serving nature of the statement and in 

the absence of any evidence. In addition, what was or 

was not reported . . . as pensionable from Jersey City is 

not germane to the Paterson matter. And, even if Jersey 

City incorrectly credited [Wasserman's] military 

stipend to his TPAF account, such error should not be 

compounded by continuing to grant pension credit 

based on an uncreditable military stipend. 

 

Whether or not the Board erred in rejecting the ALJ's factual finding, we 

remain unconvinced the evidence is relevant to our decision here. Other than 

Wasserman's unsupported statement, the factual circumstances under which 

Jersey City considered the entirety of Wasserman's salary pensionable were not 

developed in the record here. Even if they were, the actions of another employer 

do not inform our decision. 
15 A-2314-22

 In reviewing all the relevant circumstances and prevailing New Jersey 

law, we find no error in the Board's final determination that the military stipend 

being paid to Wasserman by the District is not creditable towards his TPAF 

pension. 

Affirmed.