JOHN A. SMITH, III VS. BOARD OF TRUSTEES (TEACHERS' PENSION AND ANNUITY FUND) ( 2019 )

NOT FOR PUBLICATION WITHOUT THE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-5213-17T4
JOHN A. SMITH, III,
Petitioner-Appellant,
v.
BOARD OF TRUSTEES,
TEACHERS' PENSION
AND ANNUITY FUND,
Respondent-Respondent.
____________________________
Argued October 10, 2019 – Decided November 27, 2019
Before Judges Koblitz, Whipple and Gooden Brown.
On appeal from the Board of Trustees of the Teachers'
Pension and Annuity Fund, Department of the Treasury,
PERS No. 2-454896.
Daniel W. Sexton argued the cause for appellant.
Amy Chung, Deputy Attorney General, argued the
cause for respondent (Gurbir S. Grewal, Attorney
General, attorney; Melissa H. Raksa, Assistant
Attorney General, of counsel; Austin J. Edwards,
Deputy Attorney General, on the brief).
PER CURIAM
Petitioner John Smith appeals from the May 3, 2018 final decision of the
Board of Trustees of the Teacher's Pension and Annuity Fund (Board). We
affirm.
Our review of the record reveals that effective September 1, 1968, Smith
was enrolled in the Teacher's Pension and Annuity Fund (TPAF) as a teacher
with the Jersey City Board of Education. In April 1977, after nine years of
teaching, briefly interrupted by a term of military service, Smith took an
approved leave of absence from teaching and became an Assistant Court
Administrator in Hudson County. In the court system, Smith enrolled in the
Public Employee Retirement System (PERS). On Smith's PERS enrollment
application, he advised he was a member of "New Jersey Teachers' Pension
Annuity (frozen)" and did "not wish to transfer accumulated [illegible] to this
[illegible] at this time." 1
On May 22, 1981, Smith requested an additional one-year continuation of
his leave of absence from teaching. Smith's previously-approved leave of
absence was scheduled to end September 1, 1981. While Smith never received
1
Due to the quality of the record supplied, it is difficult to see what is actually
written on the application. At present, Smith does not argue that he meant to
transfer his service from TPAF to PERS at the time of his 1977 application.
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notification confirming or denying his extended leave of absence, he simply
assumed he was granted an indefinite leave of absence.
In 1991, Smith began teaching at Hudson County Community College
(HCCC). There, Smith was eligible for enrollment in an Alternative Benefit
Program (APB), but waived his right to join and instead continued his
enrollment in PERS.
In 2003, Smith inquired about the status of his TPAF account, and was
informed by the Division of Pensions and Benefits (Division) that "consistent
with state statute and regulations, pension contributions associated with
[Smith's] inactive membership account have been transferred to the Department
of the Treasury-Unclaimed Properties [(Unclaimed Properties)]."
Nine years later, in August 2012, in reference to his December 2011
Personal Benefits Statement, Smith inquired as to why the statement had not
credited his PERS pension with his years of teaching service in Jersey City. In
response, the Division advised Smith they were aware of his roughly nine years
of service as a teacher, but reminded him that, as they informed him back in
2003, the account was escheated to Unclaimed Properties. The Division's
correspondence explained how Smith could purchase his TPAF services in his
PERS account.
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Five years later, in February 2017, Smith sought "a copy of any notice of
cessation of [his] membership in [TPAF] as [he] never withdrew from the
[p]ension." A March 20, 2017, reply again notified Smith his former
membership was transferred to Unclaimed Properties. A week later, Smith
contacted the Division and requested they accept his Application for Interfund
Transfer. In his letter, Smith stated he never received notice of termination of
his TPAF pension and his ultimate goal was to have his years of service as a
teacher be credited toward his PERS pension.
In June 2017, the Division informed Smith he was not eligible for an
interfund transfer from TPAF to PERS because his right to transfer expired
September 30, 1980, two years after his last contribution to the account. 2 Two
weeks later, Smith sent the Division another letter accompanied by
documentation to support his eligibility to transfer his TPAF service to PERS. 3
In response, the Division advised Smith he was ineligible to transfer his service
because Smith was not granted an indefinite leave of absence from teaching,
2
This appears to be an error on the part of the Division. Smith's right to transfer
his account would have ended in 1983, two years after his leave of absence
expired, not in 1980.
3
Smith's letter was not included as part of the appellate record.
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therefore his account expired two years after the end of his leave of absence.
Smith appealed the Division's determination to the Board.
In January 2018, the Board upheld the Division's administrative
determination denying Smith's request pursuant to N.J.S.A. 18A:66-7(a). In
February 2018, Smith asked the Board to reconsider its denial or grant a hearing
with the Office of Administrative Law.
By letter dated May 4, 2018, the Board denied the request for an
administrative hearing and on June 8, 2018, the Board issued a Final
Administrative Determination. This appeal followed.
"An administrative agency's interpretation of statutes and regulations
within its implementing and enforcing responsibility is ordinarily entitled to our
deference." E.S. v. Div. of Med. Assistance & Health Servs., 412 N.J. Super.
340, 355 (App. Div. 2010) (alteration omitted) (quoting Wnuck v. N.J. Div. of
Motor Vehicles, 337 N.J. Super. 52, 56 (App. Div. 2001)). However, we are "in
no way bound by [the Board's] interpretation of a statute or its determination of
a strictly legal issue." Russo v. Bd. of Trs., Police & Firemen's Ret. Sys., 206
N.J. 14, 27 (2011) (quoting 37 Steven L. Lefelt et al., New Jersey Practice:
Administrative Law Practice, § 7.19 (2d ed. 2000)). Thus, we review issues of
statutory interpretation de novo. McGovern v. Rutgers, 211 N.J. 94, 108 (2012).
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On appeal, Smith argues the Board did not comply with N.J.S.A. 18A:66-
7, which requires notice to a member's last employer sixty days prior to
membership expiration. Smith asserts the plain meaning of the statute requires
written notice of the expiration of the account, and the Board's failure to provide
such notice to his last employer violated his due process rights. Smith further
argues that while the modern TPAF statute mandates notice to the last employer,
the predecessor statute, N.J.S.A. 18:13-112.9, and the TPAF handbook provide
for additional notice to a member's home address.
N.J.S.A. 18A:66-7 governs cessation of membership in TPAF.
Membership of any person shall cease:
(a) if, except as provided in section 18A:66-8, he shall
discontinue his service for more than two consecutive
years;
(b) upon the withdrawal by a member of his
accumulated deductions as provided in this article;
(c) upon resignation and election to receive, in lieu of
the return of his accumulated deductions, the benefits
provided in section 18A:66-36 and 18A:66-37;
(d) upon retirement;
(e) at death;
but not otherwise except as provided in this article.
The pension fund shall send written notice in care of
the last employer of a member at least [sixty] days in
advance of the date on which his inactive membership
shall expire as provided in subsection (a) of this
section.
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[(emphasis added).]
Smith argues the Division never complied with the statute's written notice of
membership expiration requirement.
We begin by considering when Smith's TPAF membership actually
expired. In May 1981, Smith was notified that his previous leave of absence
was set to expire, so he asked to extend the leave of absence "until Sept[ember]
1982 due to personal business reasons and other government service." Smith
asserts he never received a response regarding his request to extend his leave of
absence to September 1982, yet Smith argued to the Division that "my
employment status was an indefinite leave of absence." Nothing in the record
supports this contention that Smith was granted an indefinite leave of absence.
Continuation of membership after a leave of absence is governed by
N.J.S.A. 18A:66-8. In relevant part, the statute states:
If a teacher: . . . discontinued from service without
personal fault or through leave of absence granted by
an employer or permitted by any law of this State; and
. . . has not withdrawn the accumulated member’s
contributions from the retirement system, the teacher’s
membership may continue, notwithstanding any
provisions of this article, if the member returns to
service within a period of [ten] years from the date of
discontinuance from service.
[N.J.S.A. 18A:66-8(a)(1)-(2).]
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Smith provided no documentation to demonstrate he was granted an
indefinite leave of absence. It defies logic to assume that where Smith only
requested a one-year extension, a lack of response meant he was granted an
indefinite leave of absence. More significantly, although Smith never resigned,
he abandoned his position as a teacher.
We have said "abandonment of employment by a public employee . . .
must be total and absolute, and that temporary nonuser or neglect of duty is not
ordinarily sufficient to sustain an inference of abandonment." McAleer v. Jersey
City Incinerator Auth., 79 N.J. Super. 142, 147 (App. Div. 1963). After his 1981
request for an additional year's leave of absence, Smith never returned to his
teaching position with the Jersey City Board of Education. Even if his leave
was approved, extending his leave until September 1982, Smith's failure to
return to teaching within ten years after his leave of absence indicates he
abandoned his position.
Smith argues he returned to work as a teacher in 1991 at HCCC in a
position that could have been covered by TPAF. N.J.S.A. 18A:64A-13
(allowing all teaching staff at county colleges to have the rights and privileges
of teachers employed by local boards of education). Smith argues he should
now be allowed to purchase his TPAF at the rate in effect in 1991. However,
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Smith declined enrollment in HCCC's ABP and instead chose to continue
making contributions to PERS; he made no contributions to his TPAF during
this time, hence, we find no basis to conclude Smith should be allowed to
purchase his service at the 1991 rate.
Smith frames the case as similar to Zigmont v. Board of Trustees, 91 N.J.
580 (1983), but his reliance on Zigmont is misplaced. Zigmont, a teacher, was
erroneously informed she could not purchase the retirement credit from a period
of maternity leave. Id. at 581. Roughly two and a half years after Zigmont
returned from her leave, she learned she would have been able to purchase the
retirement credit within one year of the end of her leave. Ibid. The Court
remanded the case to the Board to consider whether the petitioner was entitled
to a waiver, directing the Board to consider the fiscal effect on the fund and
practices in other school districts. Id. at 584.
Zigmont is different from this case, as Zigmont returned from her leave
of absence and resumed teaching at the school, where Smith did not. Further,
Zigmont was acting on misinformation from a school district employee
associated with TPAF, where Smith has alleged no misrepresentation that
caused him not to transfer his TPAF service credits. And where Zigmont took
prompt action when she learned she was misinformed, Smith should have known
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that his TPAF service credit would expire two years after the end of his leave of
absence, yet took no steps to reconcile his accounts even in 2003 when he
learned his account had been transferred to Unclaimed Properties. His next
contact with the Division was not until nine years later in August 2012, when he
inquired about his December 2011 PERS account.
Smith also argues his matter is similar to Bernstein v. Board of Trustees,
151 N.J. Super. 71 (App. Div. 1977). It is not similar. There, we determined a
teacher should be allowed to receive ordinary disability retirement benefits
when she filed an application twenty-six days late. Id. at 72, 79. In reaching
our determination, we could "discern no basis to find the Fund prejudiced by the
failure of petitioner to comply with the letter of the law." Id. at 78.
Unlike Zigmont and Bernstein, this case presents a substantial lapse in
time. Smith cannot argue the fund would not be prejudiced by his service credit
transfer when he has asked for either the ability to purchase his credit at a three -
decade-old rate, or alternatively, the fee-free transfer of his TPAF credit to
PERS.
Smith also argues he was denied due process because the Division did not
produce proof it sent notice of Smith's TPAF account expiration to the school,
his last employer. The TPAF statute provides that the Board "shall send written
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notice in care of the last employer of a member at least [sixty] days in advance
of the date on which his inactive membership shall expire." N.J.S.A. 18A:66-7.
However, this does not rise to the level of a due process claim.
"The Fourteenth Amendment's procedural protection of property is a
safeguard of the security of [property] interests that a person has already
acquired in specific benefits." Bd. of Regents of State Colls. v. Roth, 408 U.S.
564, 576 (1972). However, no lack of due process denied Smith a benefit to
which he would ordinarily be entitled. To the contrary, the service credit from
Smith's TPAF credit was sent to Unclaimed Properties, and he can still claim it.
Further, a June 2017 letter informed Smith he could purchase his TPAF credit
through his PERS account. Smith asserts purchase now is prohibitively
expensive. That may be true, but it does not mean Smith was summarily denied
the right to his property. Rather, his TPAF service credit could have been
claimed in other forms – just not via fee-free interfund transfer to his PERS
account for years after Smith sat on his rights.
Smith had notice and contact with the Division regarding his TPAF
account in 2003 when he was informed his account had been sent to Unclaimed
Properties. He did not follow up with the Division until 2012, when he was
again informed his service credit had expired. Even after this 2012
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correspondence, Smith did not contact the Division to resolve the matter until
February of 2017.
Smith's other arguments are without sufficient merit to warrant discussion
in a written opinion. R. 2:11-3(e)(1)(E).
Affirmed.
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