Michael Behar v. Board of Trustees, Etc.

• Court: New Jersey Superior Court Appellate Division
• Decided: December 15, 2023
• Docket: A-0296-22
• Status: Unpublished

Opinion

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any court ."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-0296-22

MICHAEL BEHAR,

Petitioner-Appellant,

v.

BOARD OF TRUSTEES, PUBLIC EMPLOYEES' RETIREMENT SYSTEM,

Respondent-Respondent. _________________________

Submitted November 29, 2023 – Decided December 15, 2023

Before Judges Firko and Susswein.

On appeal from the Board of Trustees of the Public Employees' Retirement System, Department of the Treasury, PERS No. xx8403.

Michael Behar, appellant pro se.

Matthew J. Platkin, Attorney General, attorney for respondent (Sookie Bae-Park, Assistant Attorney General, of counsel; Porter Ross Strickler, Deputy Attorney General, on the brief).

PER CURIAM Appellant Michael Behar appeals from an August 18, 2022 Final

Administrative Determination by respondent Board of Trustees (Board) of the

Public Employees' Retirement Systems (PERS), finding his post-retirement

employment as a full-time investigator with the Division of Law (DOL) violated

PERS statutes and regulations and required him to reimburse PERS for

retirement benefits he received. We affirm.

I.

We briefly summarize the procedural history and the factual findings

made by the Board. Behar worked for the Division of Criminal Justice (DCJ)

as a Detective 2 State Investigator. The record does not indicate the length of

his employment with the DCJ. On March 13, 2017, he applied for a Special

Service Retirement from PERS under Chapter 366. 1 On that date, Behar

completed an Application for Retirement Allowance and acknowledged three

terms and conditions of retirement by checking off boxes on the application

which state:

• "I agree to comply with all of the retirement application terms and conditions.

1 Chapter 366 created the Prosecutors Part of PERS, L. 2001, c. 366, effective Jan. 7, 2022, and codified as N.J.S.A. 43:15A-155 to -161. A-0296-22 2 • I certify that I have made no pre-arrangement to return to public employment after retirement in any capacity.

• I certify that I have read the Post-Retirement Employment Restrictions."

Behar elected a June 1, 2017, retirement date.

By letter dated May 17, 2017, the Board approved Behar's retirement

application at its regular meeting and stated: "[I]f you are considering working

after retirement, you should be aware of the restrictions imposed by laws and

regulations governing post-retirement employment." The letter also cautioned

that "it is your responsibility to inform your prospective employer that you are

receiving retirement benefits from a New Jersey public retirement system," and

that his retirement benefits "may be suspended or even cancelled entirely" in the

event of a violation, and "you will be responsible for the repayment of benefits

you were not entitled to receive."

In addition, the letter advised Behar if he became re-employed post-

retirement, he may be required to "re-enroll" in his former retirement system or

a different retirement system. Behar was instructed to read "Fact Sheet #86," a

publication of the Division of Pensions and Benefits, regarding "Post-

Retirement Employment Restrictions." The Fact Sheet #86 website address was

A-0296-22 3 included in the letter along with a phone number to call if Behar had any

questions.

In August 2021, Behar applied for an investigator position with the DO L,

which is covered by PERS. He participated in a video interview and stated that

he had retired from the DCJ and was receiving a State pension. In November or

December 2021, Behar received paperwork to fill out that addressed the pension

information. Behar completed the paperwork and returned it to the DOL.

On January 3, 2022, after collecting PERS retirement benefits for four-

and-a-half years, Behar began working thirty-five hours per week for the DOL.

His annual salary at his new job was $61,898. Behar never notified the Division

of Pensions and Benefits (Division) before starting his employment with the

DOL.

On January 28, 2022, the Division received a Notification of Employment

After Retirement Form from the DOL's External Audit Unit advising of Behar's

new post-retirement employment. Based on its investigation, the Division

concluded Behar was required to re-enroll in PERS because he was employed

full-time after retirement in a PERS covered position, citing N.J.S.A. 15A-57.2

and N.J.S.A. 43:15A-7(d)(4).

In pertinent part, N.J.S.A. 43:15A-57.2 states:

A-0296-22 4 a. Except as provided in subsections b., c., and d. of this section, if a former member of . . . [PERS], who has been granted a retirement allowance for any cause other than disability, becomes employed again in a position which makes him [or her] eligible to be a member of . . . [PERS], his [or her] retirement allowance . . . shall be canceled until he [or she] again retires.

Such person shall be re-enrolled in . . . [PERS] and shall contribute thereto at a rate based on his [or her] age at the time of re-enrollment. . . .

....

b. The cancellation, re-enrollment, and additional retirement allowance provisions of subsection a. of this section shall not apply to a former member of the [PERS] who, after having been granted a retirement allowance, becomes employed again by: (1) an employer or employers in a position or positions for which the aggregate compensation does not exceed $15,000 per year . . . .

[Ibid.]

N.J.S.A. 43:15A-7(d)(4) states in relevant part:

[N]o person in employment, office or position of the State, or an agency, board, commission, authority or instrumentality of the State, for which the hours of work are fixed at fewer than 35 per week shall be eligible to become a member of the retirement system; and no person in employment, office or position with a political subdivision of the State, or an agency, board, commission, authority or instrumentality of a political subdivision of the State, for which the hours of work are fixed by an ordinance or resolution of the political subdivision, or agency, board, commission, authority or

A-0296-22 5 instrumentality thereof, at fewer than 32 per week shall be eligible to become a member of the retirement system. Any hour or part thereof, during which the person does not work due to the person's participation in a voluntary or mandatory furlough program shall not be deducted in determining if a person's hours of work are fixed at fewer than 35 or 32 per week, as appropriate, for the purpose of eligibility and the person's service credit as a member of the system or fund shall include the period of mandatory or voluntary furlough provided the person continues to make contributions based on the person's base salary or compensation.

On February 3, 2022, the Division sent a letter to Behar and the DOL

advising he was required to re-enroll in PERS, had to repay any retirement

benefits he received after his enrollment, and that his pension benefit would be

cancelled. The Division determined it was entitled to retirement benefits Behar

received while he should have been enrolled in PERS. The Division informed

Behar that he must terminate all PERS-covered employment in order to receive

retirement benefits again, and he would have to re-apply for retirement benefits.

Thereafter, the Division suspended payment of Behar's retirement benefits

effective March 1, 2022.

On February 22, 2022, Behar attempted to obtain a prescription from a

pharmacy. The pharmacy told Behar his health benefits were suspended. When

A-0296-22 6 Behar contacted human resources about why his health benefits were suspended,

he was told it was because he returned to work.

The next day, Behar contacted PERS, and was advised a letter was sent to

him on February 3, 2022, via regular mail, stating his pension benefits were

suspended based on his new employment with the DOL. 2 Behar claimed he

never received the letter or notification by certified mail, email, or text message

that his benefits had been suspended.

Payroll records showed Behar earned $9,011.97 with the DOL from

January 3 until February 23, 2022, when he resigned from that position. After

Behar confirmed his termination with the DOL, his pension benefits were

reinstated effective March 1, 2022. By letter dated March 22, 2022, the Division

informed Behar that he was required to be re-enrolled in PERS effective January

1, 2022, as a result of his full-time employment with the DOL and that he had

to repay all of the retirement benefits which he received after the required re -

enrollment date. The Division also informed Behar as an active DOL employee,

he was not entitled to retiree health benefits during that time and had to

2 According to DOL's human resources department, "suspension" is more appropriate than "cancellation" in Behar's situation because the benefits—(1) retirement monthly allowance, (2) medical coverage, and (3) prescription drug coverage—would resume upon his resignation. See N.J.S.A. 43:15A-57.2. A-0296-22 7 reimburse PERS and the State Health Benefits Program for the benefits he

received.

Behar appealed the matter to the Board claiming the DOL interview panel

did not inform him that his re-employment would affect his retirement benefits.

He also blamed the Division for not contacting him before he started working

for the DOL. Behar requested pension benefits for February 2022, and relief

from the required repayment of the pension benefits he received in February

2022. The Board rejected these arguments and affirmed.

At its May 18, 2022 meeting, the Board considered Behar's appeal and

determined his return to full-time employment with the DOL violated PERS

statutes and regulations regarding post-retirement employment. The Board

decided Behar was an active employee in a PERS eligible position when he

began working for the DOL, and thus, he was required to reimburse the January

2022 retirement benefits he received and was not entitled to benefits for the

month of February 2022. The Board permitted Behar to retain the salary he

earned from the DOL in January and February 2022, and concluded he did not

have to pay pension contributions on the salary he received.

On July 4, 2022, Behar appealed the Board's decision, requesting the

Board reconsider its decision on the basis he notified his employer during his

A-0296-22 8 interview and filled out paperwork, thus serving as notification of his potential

employment status. Behar requested the Board "release [his] monthly allowance

for March 2022 and not request reimbursement for January 2022." At its July

20, 2022 meeting, the Board denied Behar's request for reconsideration, finding

no genuine issue of material fact existed, and directed the Board secretary to

draft a Final Administrative Determination denying his appeal. On August 5,

2022, Behar received a letter from the Board denying his request for an

administrative hearing.

On August 17, 2022, the Board issued a Final Administration

Determination denying Behar's appeal and reconsideration request. The Board

relied on N.J.S.A. 43:15A-57.2 and N.J.S.A. 43:15A-7(d)(4), and concluded

Behar was required to re-enroll in PERS as of January 3, 2022, and to reimburse

PERS for the retirement benefits he received while he was employed with the

DOL. The Board reasoned that its May 17, 2017 retirement approval letter

explained the ramifications of Behar returning to public employment while

retired and directed him to review the publicly available Fact Sheet #86. The

Board noted Behar's retirement application required him to acknowledge and

certify that he had read the rules regarding post-retirement public employment,

A-0296-22 9 and neither Behar nor his new employer, DOL, contacted the Division prior to

his return to employment with the DOL.

Because Behar resigned on February 23, 2022, before enrolling in a new

Tier 53 membership account, he was only entitled to a return of his pension

contributions for that account because he did not meet the required minimum

age of sixty-five or have the required ten years of service credit for a deferred

retirement. Thus, Behar was required to repay the $4,342 retirement check he

received for the month of January 2022, and his February 2022 retirement check

remained cancelled.

On appeal, Behar contends the Board erred when it determined he was

non-compliant with PERS rules and regulations; the Division should have

personally notified him before he began working with the DOL about the impact

it would have on his PERS pension; and the Board incorrectly found he was

3 The PERS tiers, which are determined by date of enrollment, establish the minimum retirement age. Public Employees' Retirement System (PERS) Member Handbook, 7, 26 (March 2023) https://nj.gov/treasury/pensions/documents/guidebooks/persbook.pdf (last visited Dec. 5, 2023). Pursuant to P.L. 2011, c. 78, Tier 5 employees are those who are eligible for PERS enrollment on or after June 28, 2011, and have minimum service retirement age of sixty-five. By contrast, Behar was previously employed as a Tier 1 employee for which he received retirement benefits. Pursuant to P.L. 2007, c. 92, Tier 1 employees are those that are enrolled in PERS before July 1, 2007, and these employees have a minimum service retirement age of sixty. A-0296-22 10 personally told if he returned to public employment, he should contact the

Division immediately.

II.

"[We] have 'a limited role' in the review of [agency] decisions." In re

Stallworth, 208 N.J. 182, 194 (2011) (quoting Henry v. Rahway State Prison, 81

N.J. 571, 579 (1980)). "[A] 'strong presumption of reasonableness attaches to

[an agency decision].'" In re Carroll, 339 N.J. Super. 429, 437 (App. Div. 2001)

(quoting In re Vey, 272 N.J. Super. 199, 205 (App. Div. 1993)). "In order to

reverse an agency's judgment, [we] must find the agency's decision to be

'arbitrary, capricious, or unreasonable, or . . . not supported by substantial

credible evidence in the record as a whole.'" Stallworth, 208 N.J. at 194 (quoting

Henry, 81 N.J. at 579-80). The challenging party has the burden of proving an

agency action is arbitrary, capricious, or unreasonable. Bueno v. Bd. of Trs. of

the Tchrs. Pension & Annuity Fund, 422 N.J. Super. 227, 234 (App. Div. 2011)

(citing McGowan v. N.J. State Parole Bd., 347 N.J. Super. 544, 563 (App. Div.

2002)).

We "may not substitute [our] own judgment for the agency's, even though

[we] might have reached a different result." Stallworth, 208 N.J. at 194 (quoting

In re Carter, 191 N.J. 474, 483 (2007)). "It is settled that '[a]n administrative

A-0296-22 11 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)

(quoting Wnuck v. N.J. Div. of Motor Vehicles, 337 N.J. Super. 52, 56 (App.

Div. 2001)).

We affirm the Board's decision because it is supported by the sufficient

credible evidence in the record. R. 2:11-3(e)(1)(D). We add the following

comments.

The Board had the statutory obligation to cancel Behar's benefits because

he became re-employed in a position with the DOL eligible for membership in

PERS. N.J.S.A. 43:15A-57.2(a). Such an individual "shall be re-enrolled in

PERS and shall contribute thereto at a rate based on his age at the time of re-

enrollment." N.J.S.A. 43:15A-57.2(a). The retirement benefits for previous

service resume upon subsequent retirement, and retirement benefits for

subsequent service also commence at that time if eligible. N.J.S.A. 43:15A-

57.2(a).

Moreover, N.J.A.C. 17:2-6.1(h) provides "[r]etired members who return

to public employment shall have their previous retirement allowances cancelled

and be re[-]enrolled in [PERS]." The Board "owes a fiduciary duty to its

A-0296-22 12 members to protect the financial integrity of the fund." Francois v. Bd. of Trs.,

Pub. Emps.' Ret. Sys., 415 N.J. Super. 335, 357 (App. Div. 2010) (citing Mount

v. Trs. of Pub. Emps.' Ret. Sys., 133 N.J. Super. 72, 86 (App. Div. 1975)). The

Board's duty includes safeguarding against "the dangers of manipulation of the

pension system . . . and . . . preserv[ing] the fiscal integrity of the PERS by

vigilantly guarding against abuses." Mastro v. Bd. of Trs. Pub. Emps.' Ret. Sys.,

266 N.J. Super. 445, 456 (App. Div. 1993). The Board's determination was

required by the plain text of the governing statute and was not arbitrary,

capricious, or unreasonable.

We also reject Behar's argument that the Board erred by concluding his or

DOL's failure to contact the Division prior to his re-employment required the

imposition of the penalty. Behar argues Fact Sheet #86 states: "Your employer

is required to report your employment to the [Division]." However, failure to

contact the Division was not the basis for Behar's penalty. The Board

acknowledged it did not receive notice of Behar's re-employment until a month

after he began his new position. Therefore, it could not have given any earlier

notice regarding the impact of re-employment on his retirement benefits. The

Board was unaware Behar had returned to work. The Board's decision was not

erroneous because it was based on Behar's re-employment after retirement, and

A-0296-22 13 the Board correctly determined his benefits were suspended for the duration of

his re-employment.

Behar maintains the Board improvidently based its decision on the

creation of a PERS membership account, "an action that never transpired." The

Board reasoned that "if a . . . membership account had been created for [Behar]

based on [his] new employment, [he] would not have been eligible to receive

any retirement benefit since [he] did not have the required minimum age of

[sixty-five] to retire (for a Service retirement), or sufficient pension credit (of

ten years) to file for a Deferred retirement." This statement was merely an

additional reason why Behar was not entitled to pension benefits for his period

of re-employment. More importantly, the Board's decision on this discrete issue

explained why Behar was not re-enrolled and required to pay pension

contributions on the monies he earned during his re-employment.

Behar also challenges the Board's determination he had adequate notice

of the restrictions on post-retirement employment. Specifically, the Board

found Behar (1) was personally notified that he should contact the Division

immediately if he were to decide to return to employment; and (2) he could have

availed himself of the publicly available resources on the Division's website,

such as Fact Sheet #86. The record supports these findings. Moreover, the

A-0296-22 14 Division's notice of retirement approval to Behar on May 17, 2017, constituted

personal notice that his retirement benefits were restricted.

We also reject Behar's contention that PERS was unjustly enriched

because he never received an additional benefit for the six weeks he worked

because he never re-enrolled in the retirement system. It is undisputed Behar

never re-enrolled or paid into a new pension, and he did not work long enough 4

to become a member of the retirement system for his new position with DOL.

Affirmed.

4 The Final Administrative Determination reasoned that Behar would not be entitled to retirement benefits for his new position if a PERS membership account was created because he neither reached the required retirement age of sixty-five for Service retirement nor had the requisite ten years of pension service credit for Deferred retirement. As such, Behar was not re-enrolled in PERS and not required to pay contributions from his new employment. A-0296-22 15