Opinion
DOCKET NO. A-3036-12T1
06-17-2014
GAIL W. CONNORS, Petitioner-Appellant, v. BOARD OF TRUSTEES, PUBLIC EMPLOYEES' RETIREMENT SYSTEM, Respondent-Respondent.
E. Thomas Brennan, Jr., attorney for appellant. John J. Hoffman, Acting Attorney General, attorney for respondent (Melissa H. Raksa, Assistant Attorney General, of counsel; Danielle P. Schimmel, Deputy Attorney General, on the brief).
NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
Before Judges Waugh and Accurso.
On appeal from the Board of Trustees of the Public Employees' Retirement System, Department of Treasury, PERS #2-10-268801.
E. Thomas Brennan, Jr., attorney for appellant.
John J. Hoffman, Acting Attorney General, attorney for respondent (Melissa H. Raksa, Assistant Attorney General, of counsel; Danielle P. Schimmel, Deputy Attorney General, on the brief). PER CURIAM
Gail W. Connors appeals from a final decision of the Board of Trustees (Board) of the Public Employees' Retirement System (PERS) denying her application to change her pension payment option because it was made one day beyond the period permitted by N.J.A.C. 17:2-6.3(a) (prohibiting changes to a payment selection option after retirement allowance becomes due and payable). We affirm.
The undisputed facts of record reflect that Connors was employed by Wall Township as a municipal court administrator. On March 10, 2011, Connors, through her employer, filed an on-line "Application for Retirement Allowance" effective February 1, 2012 in which she selected payment option A. On November 21, 2011, Connors completed and signed a "Change Retirement Application" to change the effective date of her retirement to June 1, 2012. Although the form permitted Connors to change her payment option as well as her retirement date, Connors did not do so.
The "Quotation of Retirement Benefits" provided to Connors explains that "Option A provides that upon your death, your beneficiary will receive, for life, the same monthly benefit that you were receiving at the time of your death. You may name only one beneficiary if you choose this payment method. If, after retirement, your beneficiary dies before you, your benefit will increase to the maximum option outlined above."
On March 13, 2012, PERS provided Connors with a "Quotation of Retirement Benefits." The document set out the annual and monthly benefit payable to Connors and her husband as beneficiary under nine different payment options with an accompanying explanation of each. The document noted that Connors had selected option A, and warned in bold print that "[o]nce you retire, you cannot change your payment method option."
The Board wrote again to Connors on March 21, 2012, advising that it had "approved your application for Service Retirement effective June 1, 2012 . . . [i]n accordance with your selection of option [A]." The letter further advised that "[i]n accordance with law, you have until thirty days after (A) the effective date of your retirement, or (B) the date your retirement was approved by the Board of Trustees, whichever is the later date, to make any changes to your retirement."
Connors retired effective June 1, 2012. On July 2, 2012, thirty-one days after the effective date of her retirement, Connors contacted PERS to change her payment option because her first retirement check was $600 less than she anticipated. Connors advised the PERS representative that her initial retirement application had been completed by her employer, and she was not aware that the option selected was not the one she wished. The PERS representative advised Connors that it was too late to make the change.
Connors next wrote to PERS advising that she had intended to select option D and had not realized that option A had been included in the application filed on-line by her employer. She explained that the final months of her employment "were very hectic and emotional" and that she had been out of the country following her retirement celebrating her forty-fifth wedding anniversary. Following an administrative review, PERS denied Connors' request to change her retirement option, and she appealed to the Board.
The "Quotation of Retirement Benefits" provided to Connors explains that "Option D provides that upon your death, your beneficiary will receive, for life, 25% of the monthly benefit that you were receiving at the time of your death. You may name only one beneficiary if you choose this payment method. If, after retirement, your beneficiary dies before you, your benefit will increase to the maximum option outlined above."
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Following an extensive review of the record, the Board likewise denied Connors' request to change her retirement option. In addition to noting Connors' selection of option A in the on-line application for retirement through the Member Benefits Online System (MBOS) filed in March 2012, the Board noted an earlier application Connors filed in 2006, later rescinded, in which she had selected the same option. The Board further noted that Connors received confirmation of her selection of option A more than three months before she retired when PERS sent her its "Quotation of Retirement Benefits" and again when it wrote notifying her that her application to retire was approved. The Board concluded that Connors thus had ample time to change her selection within the period allowed by N.J.A.C. 17:2-6.3(a) even though she was out of the country "during the period prior to July 1, 2012 when her pension became due and payable." The Board also noted that because Connors was enrolled with an MBOS account, which allows a member on-line access, she could have applied to change her option selection "from anywhere in the world where an internet connection could be found."
Connors appealed and requested an administrative hearing. She asserted that she reviewed the benefit options only after her employer submitted the retirement application on her behalf. Although then determining to select option D, Connors claimed that she "did not think to have [her employer] change the application." While acknowledging receipt of the confirmation of her benefit selection, Connors claimed that she did not read beyond the first lines. She maintained that her oversight constituted excusable neglect for which the Board could and should afford relief.
The Board denied the request for an administrative hearing on the basis that the facts were undisputed. Reiterating the facts found in its prior review, the Board issued its final determination that Connors' failure to amend her option selection within the time allowed by N.J.A.C. 17:2-6.2 and -6.3(a) precluded relief, thus denying her request to change her payment option. This appeal followed.
Connors maintains that the Board erred in declining to apply Rule 4:50-1 and in finding her testimony incredible. She also maintains that the deadline for changing her payment option should have been extended as the violation was de minimis, would not affect the fund, and PERS was closed for the weekend for the last two days of the period. She contends that a "clear financial conflict of interest existed between this Board and the applicant/appellant that influenced the Board's findings of fact and refusal to apply Rule 4:50-1," and that the Board erred in not referring the matter to the Office of Administrative Law to avoid such conflict.
We find these arguments unworthy of extended discussion. R. 2:11-3(e)(1)(E). Rule 4:50-1 is a court rule not applicable to administrative appeals. N.J.A.C. 17:2-6.2 provides that benefits become due and payable thirty days after the later of retirement or board approval; not thirty business days. Any changes must be made before benefits become due and payable, N.J.A.C. 17:2-6.3(a), which in Connors' case was on July 1, 2012. Although the Supreme Court has held that the Board possesses the inherent power to reopen a pension proceeding to approve a change in a retiree's payment option upon a showing of good cause, Steinmann v. N.J. Dep't of Treasury, Div. of Pensions, Teachers Pension & Annuity Fund, 116 N.J. 564, 573 (1989), a person seeking such relief "must demonstrate extreme hardship and a clear equity in his favor." Buono v. Bd. of Trs. of Teachers' Pension & Annuity Fund, 188 N.J. Super. 488, 493 (App. Div.), certif. denied, 94 N.J. 522 (1983).
Contrary to Connors' contention, the Board accepted her representations that she did not intend to choose option A, despite the two applications she filed selecting that option. The Board's decision was not based on a finding that Connors lacked credibility. The Board concluded on the basis of undisputed facts that Connors had clear and repeated notice of her selection and ample time to make a change within the period allowed by the PERS statute, specifically N.J.S.A. 43:15A-50 and N.J.A.C. 17:2-6.3(a). It found that Connors had simply failed to demonstrate any basis on which relief could be granted.
Our role in reviewing the decision of an administrative agency is limited. In re Carter, 191 N.J. 474, 482 (2007). We accord a strong presumption of reasonableness to an agency's exercise of its statutorily delegated responsibility, City of Newark v. Natural Res. Council in Dep't of Envtl. Prot., 82 N.J. 530, 539, cert. denied, 449 U.S. 983, 101 S. Ct. 400, 66 L. Ed. 2d 245 (1980), and defer to its fact finding. Mazza v. Bd. of Trs., Police & Firemen's Ret. Sys., 143 N.J. 22, 29 (1995) (Handler, J., dissenting). We will not upset the determination of an administrative agency absent a showing that it was arbitrary, capricious, or unreasonable; that it lacked fair support in the evidence; or that it violated legislative policies. In re Musick, 143 N.J. 206, 216 (1996); Campbell v. Dep't of Civil Serv., 39 N.J. 556, 562 (1963).
Applying those standards here, we find no basis to reverse the Board's determination. The Legislature has charged the Board with the general responsibility for the proper operation of PERS. N.J.S.A. 43:15A-17. Although Connors reminds us that pension statutes are to be liberally construed, an employee has only the rights and benefits provided by those statutes and their enabling regulations. Francois v. Bd. of Trs., Pub. Emps.' Ret. Sys., 415 N.J. Super. 335, 349 (2010). Denying relief to a member does not place the Board in a position of conflict. The Board acts in a fiduciary capacity with the obligation to serve the best interests of the pension fund and all of its beneficiaries, not just the member seeking the benefit. Mount v. Trs. of the Pub. Emps.' Ret. Sys., 133 N.J. Super. 72, 86 (App. Div. 1975).
Allowing retirees to change their benefit selection beyond the time allowed by the regulation could obviously affect the fiscal integrity of the fund. The prohibition against changing payment options after an allowance becomes due and payable is based on the necessity of maintaining the actuarial integrity of the pension system. In re Van Orden, 383 N.J. Super. 410, 422 n.7 (App. Div. 2006). While our courts have determined that the Board possesses the power to honor a pensioner's request to reopen her retirement selection after it is due and payable, the need to insure the fiscal integrity of the fund confines its exercise to those situations in which the pensioner has demonstrated "good cause, reasonable grounds, and reasonable diligence." Steinmann, supra, 116 N.J. at 573 (citing Duvin v. N.J. Dep't of Treasury, Pub. Emps.' Ret. Sys., 76 N.J. 203, 207 (1978)).
After considering the undisputed facts, the Board determined that Connors' failure to read the clear and timely notices PERS provided did not constitute good cause for allowing her to change her benefit selection beyond the time permitted by the PERS statute and regulations. Because that decision was neither arbitrary nor capricious and accords with well- established decisional law, see Duvin, supra, 7 6 N.J. at 207; Steinmann, supra, 116 N.J. at 573; In re Van Orden, supra, 383 N.J. Super. at 419-20, we affirm.
Affirmed.
I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION