IN THE MATTER OF CERTAIN EMPLOYEES OF THE GLOUCESTER COUNTY SHERIFF'S DEPARTMENT

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-2154-04T12154-04T1

IN THE MATTER OF

CERTAIN EMPLOYEES OF

THE GLOUCESTER COUNTY

SHERIFF'S DEPARTMENT

 
______________________________

Argued September 27, 2006 - Decided October 31, 2006

Before Judges Lefelt, Parrillo and Sapp-Peterson.

On appeal from the Board of Trustees of the Public Employees' Retirement System, Department of the

Treasury.

Laurence P. Bafundo argued the cause for appellants Certain Employees of the Gloucester County Sheriff's Department (Bafundo, Porter, Borbi & Clancy, attorneys; Mr. Bafundo and Vanessa P. Patrizi, on

the brief).

Debra A. Allen, Deputy Attorney General, argued the cause for respondent Board of Trustees of the Public Employees' Retirement System (Stuart Rabner, Attorney General, attorney; Patrick DeAlmeida, Assistant Attorney General, of counsel; Ms. Allen, on the brief).

PER CURIAM

Plaintiffs are twenty-eight past or present Gloucester County sheriff's officers or corrections officers and members of the Police and Firemen's Retirement System (PFRS) who seek retroactive enrollment in the Public Employees' Retirement System (PERS) for the gap time they served as temporary or provisional county employees before obtaining permanent appointment to their position. They appeal from a final decision of the PERS Board of Trustees (Board) denying their requests. We affirm.

The underlying facts are not in dispute. At all relevant times, plaintiffs were continuous full-time county employees holding PFRS-covered job titles of either sheriff's officers or corrections officers. For various times before their permanent appointment to these positions, plaintiffs were considered temporary or provisional county employees. During these gap periods, plaintiffs were not enrolled in any pension system. Ultimately, however, all plaintiffs satisfied the requirements of the Civil Service Act, N.J.S.A. 11A:1-1 to -11A:12-6, obtained permanent employment status, and consequently were properly enrolled in PFRS.

Upon enrollment, plaintiffs had the option of purchasing their prior temporary or provisional time at a virtual contribution rate to make their service record "whole." None of the plaintiffs elected to purchase this pension credit upon enrollment. Instead, of the twenty-eight plaintiffs, only fifteen subsequently exercised the purchase option. Nevertheless, all plaintiffs now seek, some in excess of fifteen years later, to have this gap time credited to their pension accounts without any contribution.

Briefly, by way of background, participation in State retirement systems was not mandatory for municipal and county employees until 1966. N.J.S.A. 43:15A-75. Prior to that time, county and municipal employers could elect to participate in PERS, its predecessor, or PFRS for their police and fire employees. Ibid. In 1966, the Legislature amended N.J.S.A. 43:15A-75, requiring mandatory enrollment in PERS for those employees who were not eligible to become a member of another retirement system. L. 1966, c. 71. Moreover, on April 9, 1985, the Legislature amended the PERS membership statute, N.J.S.A. 43:15A-7, to mandate enrollment in PERS for temporary or provisional employees in PERS-covered positions who had at least one year of continuous service in a position that did not qualify in any other system. L. 1985, c. 121.

County sheriff's officers and corrections officers were not covered by PFRS when initially created in 1944. In 1975, pension benefit coverage for these employees was transferred from PERS, where they had been included under the separate classification of "law enforcement officer," to PFRS, and new employees in these positions were required to enroll in PFRS. N.J.S.A. 43:16A-63, amended by L. 1975, c. 303. Thus, county sheriff's officers and corrections officers have been covered by PFRS since 1975. The law governing PFRS prescribes the qualifications and requirements for membership, N.J.S.A. 43:16A-1(2)(a); N.J.S.A. 43:16A-3; N.J.S.A. 43:16A-62; N.J.S.A. 43:16A-63b, and mandates that a person "employed in a position covered by [PFRS] and eligible for membership in [PFRS] is ineligible for membership in another state-administered or county or municipal retirement system." N.J.S.A. 43:16A-1.2.

By letter of January 7, 2003, plaintiffs petitioned the PERS Board for retroactive enrollment in PERS for the period that they were employed by Gloucester County as temporary or provisional employees prior to their enrollment in PFRS. Plaintiffs hired after April 9, 1985, the effective date of the amendment, based their claim of entitlement on N.J.S.A. 43:15A-7b, arguing that they were eligible for enrollment in PERS after one year of temporary employment and remained so until they obtained permanent status and were enrolled in PFRS. For those hired before that date, plaintiffs contended they were eligible for PERS enrollment on the first day of the seventeenth month of continuous full-time employment, citing N.J.A.C. 17:2-2.4(c), as it read at the relevant time. Thus, each plaintiff group claimed PERS eligibility but calculated their respective enrollment dates differently. The Board denied plaintiffs' request.

The matter was then referred to the Office of Administrative Law (OAL) for a hearing as a contested case, and heard on a summary basis. The Administrative Law Judge (ALJ) concluded that since plaintiffs were not eligible to become members of PFRS during the period that they had not fulfilled the eligibility requirements to obtain permanent appointments, they were therefore entitled to retroactive membership in PFRS. Reasoning that PERS is a "catch-all" retirement system and membership is compulsory for employees who are not enrolled in another retirement system, citing N.J.S.A. 43:15A-75(a), the ALJ concluded that plaintiffs "should be retroactively enrolled into the PERS in accordance with the requirements contained in N.J.S.A. 43:15A-7, if hired after April 9, 1985, or in accordance with N.J.A.C. 17:2-2.4(c), if hired before April 9, 1985."

Having been granted an extension of the forty-five day

limit by the OAL, on December 16, 2004, the Board issued a decision, rejecting the ALJ's finding and disallowing retroactive enrollment in PERS. The Board reasoned:

The rationale that [plaintiffs] fall into the "catch-all" category under PERS is based upon [plaintiffs'] perceived ineligibility for PFRS membership at the time of hire since the members could not meet all the requirements for PFRS membership until a later date.

. . . .

However, the Board asserts that [N.J.S.A. 43:15A-7] is to be read in pari materia with N.J.S.A. 43:15A-75. While the ALJ reviewed these statutes, along with N.J.A.C. 17:2-2.8, he did not read the laws together, as required by the in pari materia canon of construction. The evidence is uncontroverted that [plaintiffs] held PFRS-covered titles and were, therefore, "earmarked" for permanent membership in the PFRS once they met all the criteria for enrollment. Thus, by holding a PFRS-title, [plaintiffs] were PFRS-eligible, and therefore, cannot qualify for PERS membership under either N.J.S.A. 43:15A-7(b), because this statute governs PERS positions, or N.J.S.A. 43:15A-75, because [plaintiffs] were eligible for enrollment in another pension system.

. . . .

In further response to [plaintiffs'] claim for PERS enrollment under N.J.S.A. 43:15A-7(b), the Board states that the 28 [plaintiffs] who were enrolled prior to April 1985 could not attain PERS membership because the law allowing membership for temporary or provisional employees with one year's continuous service was not amended until then. Nevertheless, [plaintiffs] falling in the pre-1985 amendment class claim entitlement to PERS membership under N.J.A.C. 17:2-2.4(c) . . . . With respect to the regulation, subsection (c) is applicable to an employee of a Civil Service employer who is not in a classified position. Gloucester County is a Civil Service employer and the position of "Sheriff's Officer" is a classified position and therefore, the regulation cannot be applied to the facts of this case.

. . . .

The Board [also] finds that the [plaintiffs] should be estopped from pursuing their claim that they were denied retroactive enrollment in the PERS because as indicated above, many of the [plaintiffs] neglected to exercise their right to purchase credit through PFRS, although all had the opportunity to do so either by indicating their request on their enrollment application or by filing a separate request after they were enrolled . . . . [T]herefore, by neglecting to purchase the service credit during their first year of employment, the [plaintiffs] caused themselves to incur the additional expense. [Plaintiffs] are not entitled to relief because they failed to act in a timely manner prior to 1991.

We agree.

Upon review of an agency decision, we accord substantial deference to the agency's determination and reverse "only if it is arbitrary, capricious or unreasonable or it is not supported by substantial credible evidence in the record as a whole." Stevens v. Bd. of Trs. of the PERS, 294 N.J. Super. 643, 651 (App. Div. 1996) (emphasis omitted) (quoting Henry v. Rahway State Prison, 81 N.J. 571, 579-80 (1980)). "Although we are not obliged to defer to an agency decision on a question of law, substantial respect is accorded an agency decision interpreting and applying the statute the agency was created to enforce." In re Dennis, 385 N.J. Super. 369, 375 (App. Div. 2006). "Indeed, [a]n administrative agency's interpretation of its regulations is entitled to substantial weight." Simon v. Bd. of Trs., PFRS, 233 N.J. Super. 186, 195 (App. Div.), certif. denied, 117 N.J. 652 (1989). We should only reverse the decision if the agency's interpretation of the law is "'plainly unreasonable.'" Stevens v. Bd. of Trs. of the PERS, supra, 294 N.J. Super. at 652 (quoting Metromedia, Inc. v. Dir., Div. of Taxation, 97 N.J. 313, 327 (1984)). As the Court explained:

Even when the language of the statute is ambiguous and the Legislature has not addressed the precise question of statutory meaning, [we] may not simply impose [our] own construction on the statute, as would be necessary in the absence of an administrative interpretation. Rather, if the statute is silent or ambiguous with respect to the specific issue, the question for the court is whether the agency's answer is based on a permissible construction of the statute.

To uphold an agency's construction of a statute that is silent or ambiguous with respect to the question at issue, a reviewing court need not conclude that the agency construction was the only one it permissibly could have adopted, or even the reading the court would have reached if the question initially had arisen in a judicial proceeding.

[Matturri v. Bd. of Trs. of the Judicial Ret. Sys., 173 N.J. 368, 381-82 (2002) (quoting Kasper v. Bd. of Trs. of the Teachers' Pension and Annuity Fund, 164 N.J. 564, 581 (2000) (quoting 2 Am. Jur. 2d Admin. Law 525 (1994) (footnotes omitted))).]

Furthermore, when deciphering ambiguous language in a statute, courts must attempt to "discern the intent of the legislature." Id. at 382 (citing AMN, Inc. of N.J. v. Tp. of South Brunswick Rent Leveling Bd., 93 N.J. 518, 525 (1983)).

"A fundamental tenet of statutory construction is that by reading two statutes together courts can ascertain the legislative intent." County of Camden v. S. Jersey Port Corp., 312 N.J. Super. 387, 398 (App. Div.), certif. denied, 157 N.J. 542 (1998). Indeed, "every effort should be made to harmonize the law relating to the same subject matter. Statutes in pari materia are to be construed together when helpful in resolving doubts or uncertainties and the ascertainment of legislative intent." State v. Green, 62 N.J. 547, 554-55 (1973).

Moreover, where the Legislature has acquiesced to the agency's interpretation over a period of years, that interpretation should "be granted great weight as evidence of its conformity with the legislative intent." Malone v. Fender, 80 N.J. 129, 137 (1979). Indeed, "[t]he meaning ascribed to legislation by the administrative agency responsible for its implementation, including the agency's contemporaneous construction, long usage, and practical interpretation, is persuasive evidence of the Legislature's understanding of its enactment." Cedar Cove v. Stanzione, 122 N.J. 202, 212 (1991).

Governed by these standards, we do not find the Board's interpretation "plainly unreasonable." In effect, the Board held that the language of N.J.S.A. 43:15A-7b allowing temporary employees to enroll in PERS so long as they had a year of continuous service was further qualified by the exclusion therefrom in N.J.S.A. 43:15A-75 of those "eligible to become" enrolled in PFRS when they were temporarily employed. When viewed in pari materia, as they must since both provisions relate to the same subject matter and regulate PERS eligibility, Lewis v. Bd. of Trustees, 366 N.J. Super. 411, 417 (App. Div. 2004), we find the statutory language reasonably supports the Board's construction that temporary employees are not entitled to PERS membership if in a position from which they are otherwise eligible to become members of another pension system. By applying section 75's limitation - applicable to the broader class of employee - to amended section 7(b)'s narrower category of temporary and provisional employee, which the Legislature's words admittedly did not clearly express, the Board's interpretation sensibly harmonizes these statutory provisions and avoids unnecessary and unintended conflict. Ibid.

Moreover, the Board's interpretation of section 75's limitation is a reasonable one. That provision states:

Notwithstanding the provisions of section 74 of this act and subsection (a) of this section, every person, other than a non-veteran elected official, becoming an employee of a county, board of education, municipality or school district after June 30, 1966, who is not eligible to become a member of another retirement system, shall be required to become a member of the Public Employees' Retirement System.

[N.J.S.A. 43:15A-75(b) (emphasis added).]

Plaintiffs claim entitlement to retroactive PERS membership pursuant to N.J.S.A. 43:15A-7b simply because they were temporary employees who completed one year of continuous service with the county. However, this position ignores the exclusionary bar of N.J.S.A. 43:15A-75, with which N.J.S.A. 43:15A-7b must be read in pari materia, and which disqualifies employees from membership in PERS who are "eligible to become" members of PFRS. On this score, plaintiffs read the statutory mandate as requiring compulsory PERS membership for employees not already enrolled in another retirement system and perceive themselves as PERS-eligible and thus PRFS-ineligible because at the time of hire they did not satisfy all the requirements for PFRS membership. The defect in this reasoning, however, is simply that N.J.S.A. 43:15A-75 speaks in terms of "eligible to become," and clearly contemplates future as well as present qualification.

Here, as the Board found, plaintiffs, while temporary employees, held the PFRS-covered job titles of sheriff's officers or corrections officers and were, by virtue of these positions, eligible to become at some later date permanent members of PFRS once they met all the criteria for enrollment. In other words, plaintiffs were all eligible for enrollment in PFRS upon completion of the statutory requirements for membership in the pension system, including civil service requirements set forth by the New Jersey State Department of Personnel and the achievement of permanent employment status. N.J.S.A. 43:16A-3; N.J.S.A. 43:16A-1(2)(a). Indeed, even the ALJ acknowledged that plaintiffs were "titled and targeted for PFRS at the time of their provisional or temporary employment." Consequently, by holding a PFRS title while temporarily employed, plaintiffs may reasonably be considered PFRS-eligible and therefore not qualified for PERS membership under either N.J.S.A. 43:15A-7b because that statute governs PERS positions, or N.J.S.A. 43:15A-75 because plaintiffs were eligible to become enrolled in another retirement system. And for those plaintiffs hired prior to April 9, 1985, they failed to qualify for PERS membership for yet another reason, namely the statute allowing membership for temporary or provisional employees with one year of continuous service was not amended until after their hire.

The contrary construction advanced by plaintiffs is at odds with the longstanding administrative practice that employees who would be eligible to enroll in PFRS once they met all the statutory enrollment criteria were not eligible to enroll in PERS. This administrative policy, in turn, was based on the agency's interpretation and reconciliation of the laws governing the two retirement systems. As noted, not only do we defer to the interpretation of a statute by the agency charged with its enforcement, Matturri v. Bd. of Trs. of the Judicial Ret. Sys., 173 N.J. 368, 381 (2002), but we accord substantial weight to the Legislature's acceptance of, and acquiescence in, that interpretation over the years. Id. at 382. We see no reason to depart from these principles in this case.

We are further satisfied that the Board's decision works no fundamental unfairness to plaintiffs and that the equities actually weigh against them. Once enrolled in PFRS, plaintiffs had the option to purchase their prior temporary or provisional time to make their service record "whole." N.J.S.A. 43:16A-4. Thus, plaintiffs were provided the opportunity to close any gaps in benefits coverage occurring during the period of delayed enrollment in PFRS when they were temporary or provisional employees. Instead, plaintiffs opted not to purchase the service credit during their first year of permanent appointment. Moreover, for those plaintiffs electing to purchase the credit later, additional expenses were incurred by their refusal to do so earlier. Now, more than fifteen years later in some cases, when the cost of a service credit is much higher due to the member's age and salary, plaintiffs are claiming entitlement to retroactive enrollment in PERS. Under the circumstances, given the excessive delay by plaintiffs in asserting the right on the one hand, and on the other, the potentially adverse impact of a contrary decision on the fiscal integrity of the fund, we are satisfied that, even if statutorily entitled, plaintiffs are equitably estopped from pursuing their claim for retroactive enrollment in PERS. See Northwest Covenant Med. Ctr. v. Fishman, 167 N.J. 123, 140 (2001) (quoting Lavin v. Board of Educ. of Hackensack, 90 N.J. 145, 151 (1982)); City of Atlantic City v. Civil Serv. Comm'n, 3 N.J. Super. 57, 60 (App. Div. 1949).

 
Plaintiffs' remaining arguments are without merit. R. 2:11-3(e)(1)(D) & (E).

Affirmed.

Prior to 1991, PFRS members could obtain pension credit by agreeing to make additional contributions comparable to their contributions to the retirement system within their first year as a permanent employee. L. 1991, c. 138. After 1991, PFRS members could purchase such credit at any time during active membership in the retirement program. Ibid. However, the cost after 1991 was based on the member's age and salary at the time of request.

(continued)

(continued)

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A-2154-04T1

October 31, 2006