Court Opinion

ID: 9961222
Source: CourtListenerOpinion
Date Created: 2024-04-18 14:08:08.945046+00
Date Added: 2024-06-11T08:20:28.455457
License: Public Domain

NOT FOR PUBLICATION WITHOUT THE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.

                                                        SUPERIOR COURT OF NEW JERSEY
                                                        APPELLATE DIVISION
                                                        DOCKET NO. A-1316-21

VERONICA (STORLEY)
WILLIAMS,

          Petitioner-Appellant,

v.

BOARD OF TRUSTEES,
PUBLIC EMPLOYEES'
RETIREMENT SYSTEM,

     Respondent-Respondent.
__________________________

                   Submitted April 8, 2024 – Decided April 18, 2024

                   Before Judges Marczyk and Chase.

                   On appeal from the Board of Trustees of the Public
                   Employees' Retirement System, Department of the
                   Treasury, PERS No. xx8650.

                   Alterman & Associates, LLC, attorneys for appellant
                   (Stuart J. Alterman, on the brief).

                   Matthew J. Platkin, Attorney General, attorney for
                   respondent (Janet Greenberg Cohen, Assistant Attorney
                   General, of counsel; Robert E. Kelly, Deputy Attorney
                   General, on the brief).
PER CURIAM

      Petitioner Veronica (Storley) Williams appeals from a November 18, 2021

final determination by the Board of Trustees of the Public Employees'

Retirement System ("PERS") denying her petition to reopen her expired account

so that funds and service credit could be transferred to the Police and Firemen's

Retirement System ("PFRS"). We affirm.

                                       I.

      Petitioner enrolled in PERS in 2002 in connection with her job as a

secretary for the State. In 2013, she resigned from her position to accept a new

job as a Mercer County Corrections Officer, a role eligible for participation in

PFRS. She enrolled in the police academy but, due to an injury, did not graduate.

Instead, she joined a subsequent academy class and completed her training in

November 2015.     While she remained an employee of the Mercer County

Department of Corrections during this two-and-a-half-year period, holding a

PFRS-eligible job title, she could not enroll in PFRS prior to completing her

training.

      Meanwhile, in August 2013, when initially attempting to enroll in PFRS,

petitioner completed a Division of Pensions and Benefits ("Division") "Report

of Transfer" form noting her existing PERS membership number. Initially,

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PERS issued petitioner a Certification of Payroll Deductions, acknowledging

Mercer County as her new employer and notifying her that six back PERS

deductions and twenty-two pension-loan-repayment deductions would begin in

November 2013. However, because petitioner did not complete her training, the

processing of her transfer was reversed before any PERS deductions were made

by way of an inter-departmental memorandum. The memorandum noted as a

full-time employee of Mercer County in a PFRS-eligible role, she could not

remain a member of PERS.

      In March 2015, the Division sent petitioner a letter stating the two-year

anniversary of her last contribution to PERS—June 30, 2013—was imminent.

The letter informed petitioner she was eligible to apply for a retirement benefit,

having maintained her PERS membership for over ten years. The letter directed

her to the "Expired Accounts" section of the Division's website for further

information.

      In November 2015, after petitioner completed her training, a Mercer

County employee completed PFRS enrollment paperwork for petitioner. She

faxed the PFRS enrollment department three pages: a cover sheet, a copy of the

certification of petitioner's eligible appointments, and petitioner's June 2014

half-complete application for interfund transfer. PFRS confirmed receipt of

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petitioner's enrollment via email, and PFRS payroll deductions began in

December 2015.

      In March 2016, PFRS informed Mercer County it could not complete the

interfund transfer because petitioner's PERS account had expired on June 30,

2015. The Division later confirmed this, informing petitioner while she was not

eligible for membership in either pension system from April 2013 to November

2015, she may be eligible to purchase service credit for those dates.

      On January 14, 2020, the PFRS Board confirmed the Division's

determination and again denied petitioner's application for interfund transfer as

untimely. It reiterated its earlier suggestion for her to investigate options to

withdraw the funds from her expired PERS account and purchase service credits.

The matter was transferred to the Office of Administrative Law ("OAL") as a

contested case. After a status conference, the case was placed on the inactive

list pending petitioner's application to the PERS Board.

      In June 2021, petitioner asked the PERS Board to reopen her account so

that PFRS could consider accepting the funds. Among other things, she argued

she received no notice of the expiration of her PERS account, and therefore no

notice the interfund transfer was not possible until it was too late to remedy the

situation. She appealed to the PERS Board's power to fashion an equitable

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remedy in her favor.     On September 13, 2021, the PERS Board denied

petitioner's request to reopen her account. Petitioner requested the matter be

transferred to the OAL as a contested matter.

      On November 18, 2021, after declining to transfer the matter to the OAL

because there was "no genuine issue of material fact in dispute," the PERS Board

issued its final determination, confirming its denial of petitioner's request to

reactivate her expired PERS account. The PERS Board found the August 2013

Report of Transfer and the Certification of Payroll Deductions slated to begin

November 2013 were processed in error and then reversed because employees

cannot contribute to PERS when they hold permanent PFRS-eligible positions.

The PERS Board also found petitioner received communications about her

pension both in August and October of 2014, and requested an audit of her

account in December 2014 "due to her interest in purchasing missing time." It

also highlighted the March 2015 letter directing her to the "Expired Accounts"

area of the Division's website, as well as a June 2015 letter directing her to

submit a purchase application for the service credits. Applying the law to these

facts, the PERS Board concluded that by operation of N.J.S.A. 43:15A-7(e),

petitioner's PERS membership account expired on June 30, 2015.            As to

petitioner's charges of inadequate notice, the PERS Board stated the information

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was "not only codified by statute," but "widely available on the Division's web

site."

         This appeal followed.

                                          II.

         We begin by acknowledging judicial review of an agency's final

determination is limited.        Allstars Auto Grp., Inc. v. N.J. Motor Vehicle

Comm'n, 234 N.J. 150, 157 (2018) (citing Russo v. Bd. of Trs., Police &

Firemen's Ret. Sys., 206 N.J. 14, 27 (2011)). "An agency's determination on the

merits '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.'" Saccone

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

Russo, 206 N.J. at 27). This standard "is generally understood to involve inquiry

into whether the decision conforms with relevant law, whether there is

substantial credible evidence in the record as a whole to support the agency's

decision, and whether in applying the relevant law to the facts, the agency

clearly erred in reaching its conclusion." In re State & Sch. Emps.' Health

Benefits Comm'ns' Implementation of Yucht, 233 N.J. 267, 280 (2018) (citing

In re Carter, 191 N.J. 474, 482-83 (2007)).

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      "[A]n enhanced deferential standard" applies to agency decisions related

to the enforcement of a statutory scheme. East Bay Drywall, LLC v. Dep't of

Lab. & Workforce Dev., 251 N.J. 477, 493 (2022) (citing Hargrove v. Sleepy's,

LLC, 220 N.J. 289, 301-02 (2015)). This deference specifically applies to the

agencies administering public pensions because of the "experience and

specialized knowledge" required in "administering and regulating a legislative

enactment within its field of expertise." Tasca v. Bd. of Trs., Police & Firemen's

Ret. Sys., 458 N.J. Super. 47, 55 (App. Div. 2019) (quoting Piatt v. Police &

Fireman's Ret. Sys., 443 N.J. Super. 80, 99 (App. Div. 2015)).

                                       III.

                                        A.

      The law applicable to this case is derived from the statutes governing

PERS and PFRS, regulations governing the transfer of funds from one pension

system to another, and case law construing the same.

      N.J.S.A. 43:15A-1 to -161 provides the statutory scheme governing PERS.

The provision for eligibility states, in pertinent part, "[m]embership of any

person in the retirement system shall cease if he shall discontinue his service for

more than two consecutive years." N.J.S.A. 43:15A-7(e). Similarly, a provision

governing disbursement of accumulated deductions to withdrawn members

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provides a member "shall cease to be a member two years from the date [the

member] discontinued service as an eligible employee, or, if prior thereto, upon

payment to [the member] of [the member's] accumulated deductions." N.J.S.A.

43:15A-41(a).

      N.J.S.A. 43:16A-1 to -68 governs PFRS. The provision for transfer of

credit from another public pension system states:

            A member who is a member of another State-
            administered retirement system or pension fund at the
            time of enrollment in [ ] [PFRS] and does not contribute
            to the other system or fund after that time may transfer
            the service credit in the other system or fund to [ ]
            [PFRS] upon application and transfer of the member's
            contributions from the other system or fund to the
            system. If the member has withdrawn the contributions
            to the other retirement system or pension fund, the
            member may purchase credit for the service in the other
            system or fund.

            [N.J.S.A. 43:16A-11.6 (emphasis added).]

      The administrative code regulating PFRS states employees appointed to a

PFRS-eligible position "shall be considered for PFRS enrollment upon

successful completion of the police or firefighting training." N.J.A.C. 17:4 -

2.6(a).   Enrollment is not permitted "until the employer certifies that the

employees have successfully completed the police or firefighting training."

N.J.A.C. 17:4-2.6(d).

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      The regulatory provision for interfund transfers between systems prohibits

the transfer of credit from a former system into a new system where "[t]he

account is inactive; that is, it has been more than two years from the date of the

last contribution nor has the member's account remained active due to the

provisions of N.J.S.A. 43:15A-8." N.J.A.C. 17:2-7.1(b)(5)(iii).

      It is a long-standing proposition that pension statutes "should be liberally

construed and administered in favor of the persons intended to be benefited

thereby." Geller v. Dep't of Treasury, 53 N.J. 591, 597-98 (1969). However,

this liberality is to be applied when the employee is eligible for benefits, "but

eligibility is not to be liberally permitted." Smith v. Dep't of Treasury, Div. of

Pensions & Benefits, 390 N.J. Super. 209, 213 (App. Div. 2007). Rather, in

determining eligibility, "applicable guidelines must be carefully interpreted so

as not to 'obscure or override considerations of . . . a potential adverse impact

on the financial integrity of the [f]und.'" Ibid. (alteration in original) (quoting

Chaleff v. Tchrs.' Pension & Annuity Fund Trs., 188 N.J. Super. 194, 197 (App.

Div. 1983)).

      Application of these statutory schemes and regulations to the uncontested

facts plainly supports the Board's decision. N.J.S.A. 43:15A-7(e) clearly marks

the end of petitioner's PERS membership on June 30, 2015, two years from the

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date of her last contribution. N.J.A.C. 17:4-2.6(a) clearly marks her eligibility

for PFRS enrollment in November 2015 when she completed her training and

Mercer County certified that completion. N.J.S.A. 43:16A-11.6 permits transfer

of funds into PFRS for those who are members of another system at the time of

enrollment.   By the time petitioner enrolled in PFRS and submitted her

application for interfund transfer, the regulations governing interfund transfer

prohibited the transfer because her PERS account was made inactive two years

after her last contribution, and she was no longer a PERS member.

      The PERS Board's decision was a statutorily mandated outcome, because

when petitioner submitted her first transfer application, which was initially

processed but subsequently reversed, she was not a member of another pension

system into which her PERS account could have been transferred. Therefore,

"the persons intended to be benefited" by a liberal construction of these statutes

and regulations did not include petitioner, who was no longer a member at the

time of her untimely application. The agency's decision conformed with the law

and was supported by the evidence in the record. It was not arbitrary, capricious,

or unreasonable.

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                                       B.

      Petitioner next argues she did not have adequate notice that her PERS

account was going to expire. She argues the March 11, 2015 letter provided far

less information than the communication at issue in Fiola v. State Department

of Treasury, Division of Pensions, 193 N.J. Super. 340 (App. Div. 1984), which

we found failed to apprise a petitioner of a two-year deadline to apply for a

deferred retirement allowance.

      The PERS Board acknowledges the "Report of Transfer" form was

initially processed, but because she did not complete the academy, it was

cancelled. Petitioner's pay never reflected deductions for pension contributions.

The PERS Board notes in December 2014, petitioner characterized her transfer

request as "pending," which evidenced her knowledge the transfer had, in fact,

not taken place. The PERS Board also pointed to the March 11, 2015 letter as

notice that her account would be expiring.

      Adequate notice "is notice reasonably calculated, under all the

circumstances, to apprise interested parties of the pendency of the action and

afford them an opportunity to present their objections."      Mullane v. Cent.

Hanover Bank & Tr. Co., 339 U.S. 306, 314 (1950). Our Supreme Court has

held, "[t]o be reasonable, an agency's choice of action for providing notice does

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not require adoption of a perfect practice. But . . . the means of notice in

fulfillment of [the agency's] statutory policy similarly must be designed to

reasonably achieve its intended purpose." Yucht, 233 N.J. at 282.

      In Fiola, we considered an application to PFRS made more than seven

years after a retiree left service and elected a deferred retirement allowance. 193

N.J. Super. at 343. The PFRS Board denied the application, interpreting the

membership provision, deactivating a retiree's account two years after the date

of the last contribution, to bar the retiree from making any election after the

expiration other than the return of the aggregate contributions.       Id. at 347.

Because the deferred retirement allowance statute contained no such mandate

that the application be made within two years of the last contribution, we

reversed and held any inactive member could apply for deferred retirement

allowance at any time. Id. at 349. While this statutory interpretation was the

basis for reversal of the PFRS Board's conclusion, we did comment in passing

that the forms sent to Fiola, which urged him to exercise a withdrawal option,

were not sufficient notice of the purported two-year deadline, as they did not

include any information on the deferred retirement allowance he sought to elect.

Id. at 352.

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      No contradictory or incomplete communications akin to those implicated

in Fiola are present in this record. Petitioner has presented no communication

from the PERS Board communicating any timeframe other than the two-year

timeline described in N.J.S.A. 43:15A-7(e) and N.J.S.A. 43:15A-41(a). The

Division's March 11, 2015 letter explicitly informed her the two-year

anniversary of her last PERS contribution was imminent and directed her to find

more information in the "Expired Accounts" portion of the Divisi on's website.

In view of the statutory and regulatory provisions that govern PERS

membership, all members have constructive notice that an account expires two

years after the date of the last contribution. The expiration provision also would

have been available to petitioner through her PERS Member Handbook.

Moreover, petitioner would have been on notice that her transfer was not

affected when her paychecks from June 2013 to November 2015 did not reflect

deductions for contributions to either pension system.

      To the extent petitioner also contests as deficient any notice of the reversal

of her transfer application by the November 2013 memo, it is PFRS, not PERS,

that processed and then reversed the interfund transfer. Thus, the adequacy

regarding notice of the November 2013 memo's implications is better addressed

in petitioner's companion appeal currently before the OAL. See Francois v. Bd.

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of Trs., Pub. Emps.' Ret. Sys., 415 N.J. Super. 335, 352 (App. Div. 2010)

(another state agency cannot "bind PERS regarding its authority or the pension

laws"). Further, it is clear from the record the transfer application was not

reversed due to expiration of petitioner's PERS account, since her PERS account

had not yet expired when the memo was sent. Rather, the transfer was reversed

because petitioner, having not graduated from the academy, could not yet be

enrolled in PFRS, and therefore no PFRS account existed into which her funds

and service credit could be transferred.

                                        C.

      Finally, petitioner argues the law requires the statutory scheme to be

interpreted to her benefit and urges us to force the PERS Board to use its inherent

equitable powers to relax the statutory restrictions on her account's expiration.

      Our courts have recognized "the inherent power of an administrative

agency, in the absence of legislative restriction, to reopen or to modify and to

rehear orders previously entered by it." Duvin v. N.J. Dep't of Treasury, Pub.

Emps.' Ret. Sys., 76 N.J. 203, 207 (1978) (emphasis added). See also Steinmann

v. N.J. Dep't of Treasury, Div. of Pensions, Tchrs.' Pension Annuity Fund, 116

N.J. 564, 573 (1989); Skulski v. Nolan, 68 N.J. 179, 195-96, (1975); Ruvoldt v.

Nolan, 63 N.J. 171, 183-84 (1973); In re Van Orden, 383 N.J. Super. 410, 419-

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20 (App. Div. 2006).      In Minsavage for Minsavage v. Board of Trustees,

Teachers' Pension & Annuity Fund, on which petitioner relies, the Supreme

Court found it appropriate to allow the reopening of a retirement selection

"where good cause, reasonable grounds, and reasonable diligence are shown."

240 N.J. 103, 107 (2019).

      The record reflects petitioner's inability to satisfy the "good cause,

reasonable grounds, and reasonable diligence" justifying reversal in Minsavage.

She asserts the request for transfer application "would not have been problematic

if she had received notice that [it] did not process," but petitioner herself did not

timely contact her former employer to complete the bottom half of the

application, inexplicably partially completed by petitioner over a year after

separating from PERS-eligible employment but not submitted until well after

the two-year deadline. Had she submitted the form to her former employer as

required after completing her portion in June 2014, and then forwarded the

completed form to PFRS, she would have been on notice long before her PERS

account was deactivated, both that her last deduction was made on June 30,

2013, and that the interfund transfer was not yet possible. The Board's power to

reopen petitioner's account is specifically limited by the legislative restrictions

and regulatory codifications. The "persons intended to be benefited" by public

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                                        15
pensions are all their members, not merely a single former member seeking a

result contrary to the interest of other members and to the plain language of the

statutory and regulatory schemes.

      To the extent that we have not addressed petitioner's remaining arguments,

we find they lack sufficient merit to warrant discussion in a written opinion. R.

2:11-3(e)(1)(D) and (E).

      Affirmed.

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