NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any court ."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-2314-22
RICHARD WASSERMAN,
Petitioner-Appellant,
v.
BOARD OF TRUSTEES OF THE TEACHERS' PENSION AND ANNUITY FUND,
Respondent-Respondent. __________________________
Argued April 24, 2024 – Decided May 16, 2024
Before Judges Susswein and Vanek.
On appeal from the Board of Trustees of the Teachers' Pension and Annuity Fund, Department of the Treasury, Agency Docket No. TPAF No. xx4397.
Albert J. Leonardo argued the cause for appellant (Zazzali PC, attorneys; Albert J. Leonardo, of counsel and on the briefs).
Payal Y. Ved, Deputy Attorney General, argued the cause for respondent (Matthew J. Platkin, Attorney General, attorney; Janet Greenberg Cohen, Assistant Attorney General, of counsel; Payal Y. Ved, on the brief).
PER CURIAM
Petitioner Richard Wasserman appeals a March 10, 2023 final
administrative determination by respondent, the Board of Trustees (the Board)
of the Teachers' Pension and Annuity Fund (the TPAF), denying his request for
the bi-weekly military stipend paid to him by the federal government through
his present employer, the Paterson School District (District), to be deemed
TPAF pension-creditable compensation. After careful review of the record and
prevailing New Jersey law, we affirm the Board's final determination.
I.
We recount the salient facts in the record before us. On July 16, 2018,
Wasserman was hired by the District for a "Teacher Military Science" position
at John F. Kennedy High School (JFK School) in the School of Architecture and
Construction Trade. The employment contract for the 2018-19 school year fixed
the annual salary at $59,105.
At the JFK School, Wasserman taught at least five class periods per day
in addition to managing the school's Junior Reserve Officers' Training Corps
(JROTC) unit. His duties were specified in a written job description and
included administering the JROTC summer leadership camp; coordinating with
A-2314-22 2 senior school officials in establishing operating procedures relating to the
administration, control, and training of JROTC cadets; and conducting public
affairs efforts. Wasserman's job description specified that he was to direct and
participate in "service learning and community service events" including
weekend duties, as applicable. He was also required to establish and maintain
at least two integrated or extracurricular teams such as drill team, color guard,
and raider team. The "environmental demands" section of Wasserman's job
description stated he was required to attend off-site training events.
A collective negotiations agreement (CNA) between the Paterson
Education Association (PEA) and the District set forth compensation ranges
should the District decide to augment an employee's salary for assisting with
certain extracurricular activities. The CNA's salary range for approved JROTC
extracurricular activities spanned from $6,262 to $7,829 per year.1 Wasserman
did not receive additional pay under the salary schedule for any extracurricular
activities or additional duties.
The federal government controls the amount JROTC instructors are paid
pursuant to 10 U.S.C. § 2031(d). For Wasserman's first year of employment,
the District was advised by the federal government his required minimum
1 The guide provided in the appendix was for the 2016-17 school year. A-2314-22 3 instructor pay (MIP) was $94,605.90 based on his U.S. Army service time and
rank. The District was required to certify Wasserman's JROTC employment
every year by submitting an Annual Certification of Pay and Data Form.
The federal government remitted funds to the District for the difference
between Wasserman's contractual salary and the required $9,460.59 MIP. Those
federal funds were then distributed by the District to Wasserman as a military
stipend. Wasserman received two separate bi-weekly paychecks from the
District, which were individually designated on each check as "military stipend"
and "regular earnings." The District only deducted TPAF pension contributions
from Wasserman's regular earnings. No pension deductions were taken from
Wasserman's miliary stipend. The District issued Wasserman W-2 forms for the
2019 and 2020 tax years which set forth the annual income paid to him as
$105,332.46 and $105,576.90, respectively.
On February 14, 2020, Wasserman requested the State of New Jersey,
Department of the Treasury, Division of Pension and Benefits (the State)
conduct an audit to determine why only half of his salary was subject to pension
contributions stating:
Paterson has paid one-half of [Wasserman's] salary and the United States Army has paid one-half of his salary. As such, [Wasserman] receives two paychecks on each payroll date. . . . The portion of [Wasserman's] salary paid
A-2314-22 4 by the Army is not for any additional work beyond his teaching duties and is thus not a stipend. As such, [Wasserman's] entire salary should be reported by the District to the [State] and should be subject to pension contributions.
On May 6, 2021, the State responded and advised the District correctly
reported Wasserman's salary for the 2018-19, 2019-20, and 2020-21 school years
since any supplementary salary paid to him by the federal government was additional
compensation beyond his contractual salary and was not pensionable under N.J.S.A.
18A:66-2(d)(1) and N.J.A.C. 17:3-4.1 (2015). On June 15, 2021, Wasserman
appealed the State's determination and the matter was transferred to the Office of
Administrative Law (OAL) for a contested hearing.
On July 12, 2022, the OAL held a hearing at which Wasserman testified and
various documents were moved into evidence. On December 16, 2022, the
Administrative Law Judge (ALJ) issued an initial decision concluding
"notwithstanding the absence of a salary guide specific to JROTC instructors,
Wasserman's 'compensation' under N.J.S.A. 18A:66-1 . . . was the MIP." The ALJ
found that although Wasserman's military stipend was paid through a separate check,
it was part of his regular bi-weekly compensation and represented payment for duties
not addressed in Wasserman's base compensation, but which were integral to the
A-2314-22 5 effective functioning of his position. Therefore, the ALJ concluded Wasserman's
military stipend was pension creditable.
At its meeting on February 2, 2023, the Board rejected the ALJ's initial
decision and reaffirmed its decision denying Wasserman's request for his military
stipend to be deemed pension creditable. On March 10, 2023, the Board confirmed
this determination in a final administrative decision. The Board found Wasserman
was hired by the District under a salary contract and any compensation received
beyond the contractually designated amount was considered extra compensation and
not pension creditable pursuant to N.J.A.C. 17:3-4.1(a)(1)(x) (2015).
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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-2314-22
RICHARD WASSERMAN,
Petitioner-Appellant,
v.
BOARD OF TRUSTEES OF THE TEACHERS' PENSION AND ANNUITY FUND,
Respondent-Respondent. __________________________
Argued April 24, 2024 – Decided May 16, 2024
Before Judges Susswein and Vanek.
On appeal from the Board of Trustees of the Teachers' Pension and Annuity Fund, Department of the Treasury, Agency Docket No. TPAF No. xx4397.
Albert J. Leonardo argued the cause for appellant (Zazzali PC, attorneys; Albert J. Leonardo, of counsel and on the briefs).
Payal Y. Ved, Deputy Attorney General, argued the cause for respondent (Matthew J. Platkin, Attorney General, attorney; Janet Greenberg Cohen, Assistant Attorney General, of counsel; Payal Y. Ved, on the brief).
PER CURIAM
Petitioner Richard Wasserman appeals a March 10, 2023 final
administrative determination by respondent, the Board of Trustees (the Board)
of the Teachers' Pension and Annuity Fund (the TPAF), denying his request for
the bi-weekly military stipend paid to him by the federal government through
his present employer, the Paterson School District (District), to be deemed
TPAF pension-creditable compensation. After careful review of the record and
prevailing New Jersey law, we affirm the Board's final determination.
I.
We recount the salient facts in the record before us. On July 16, 2018,
Wasserman was hired by the District for a "Teacher Military Science" position
at John F. Kennedy High School (JFK School) in the School of Architecture and
Construction Trade. The employment contract for the 2018-19 school year fixed
the annual salary at $59,105.
At the JFK School, Wasserman taught at least five class periods per day
in addition to managing the school's Junior Reserve Officers' Training Corps
(JROTC) unit. His duties were specified in a written job description and
included administering the JROTC summer leadership camp; coordinating with
A-2314-22 2 senior school officials in establishing operating procedures relating to the
administration, control, and training of JROTC cadets; and conducting public
affairs efforts. Wasserman's job description specified that he was to direct and
participate in "service learning and community service events" including
weekend duties, as applicable. He was also required to establish and maintain
at least two integrated or extracurricular teams such as drill team, color guard,
and raider team. The "environmental demands" section of Wasserman's job
description stated he was required to attend off-site training events.
A collective negotiations agreement (CNA) between the Paterson
Education Association (PEA) and the District set forth compensation ranges
should the District decide to augment an employee's salary for assisting with
certain extracurricular activities. The CNA's salary range for approved JROTC
extracurricular activities spanned from $6,262 to $7,829 per year.1 Wasserman
did not receive additional pay under the salary schedule for any extracurricular
activities or additional duties.
The federal government controls the amount JROTC instructors are paid
pursuant to 10 U.S.C. § 2031(d). For Wasserman's first year of employment,
the District was advised by the federal government his required minimum
1 The guide provided in the appendix was for the 2016-17 school year. A-2314-22 3 instructor pay (MIP) was $94,605.90 based on his U.S. Army service time and
rank. The District was required to certify Wasserman's JROTC employment
every year by submitting an Annual Certification of Pay and Data Form.
The federal government remitted funds to the District for the difference
between Wasserman's contractual salary and the required $9,460.59 MIP. Those
federal funds were then distributed by the District to Wasserman as a military
stipend. Wasserman received two separate bi-weekly paychecks from the
District, which were individually designated on each check as "military stipend"
and "regular earnings." The District only deducted TPAF pension contributions
from Wasserman's regular earnings. No pension deductions were taken from
Wasserman's miliary stipend. The District issued Wasserman W-2 forms for the
2019 and 2020 tax years which set forth the annual income paid to him as
$105,332.46 and $105,576.90, respectively.
On February 14, 2020, Wasserman requested the State of New Jersey,
Department of the Treasury, Division of Pension and Benefits (the State)
conduct an audit to determine why only half of his salary was subject to pension
contributions stating:
Paterson has paid one-half of [Wasserman's] salary and the United States Army has paid one-half of his salary. As such, [Wasserman] receives two paychecks on each payroll date. . . . The portion of [Wasserman's] salary paid
A-2314-22 4 by the Army is not for any additional work beyond his teaching duties and is thus not a stipend. As such, [Wasserman's] entire salary should be reported by the District to the [State] and should be subject to pension contributions.
On May 6, 2021, the State responded and advised the District correctly
reported Wasserman's salary for the 2018-19, 2019-20, and 2020-21 school years
since any supplementary salary paid to him by the federal government was additional
compensation beyond his contractual salary and was not pensionable under N.J.S.A.
18A:66-2(d)(1) and N.J.A.C. 17:3-4.1 (2015). On June 15, 2021, Wasserman
appealed the State's determination and the matter was transferred to the Office of
Administrative Law (OAL) for a contested hearing.
On July 12, 2022, the OAL held a hearing at which Wasserman testified and
various documents were moved into evidence. On December 16, 2022, the
Administrative Law Judge (ALJ) issued an initial decision concluding
"notwithstanding the absence of a salary guide specific to JROTC instructors,
Wasserman's 'compensation' under N.J.S.A. 18A:66-1 . . . was the MIP." The ALJ
found that although Wasserman's military stipend was paid through a separate check,
it was part of his regular bi-weekly compensation and represented payment for duties
not addressed in Wasserman's base compensation, but which were integral to the
A-2314-22 5 effective functioning of his position. Therefore, the ALJ concluded Wasserman's
military stipend was pension creditable.
At its meeting on February 2, 2023, the Board rejected the ALJ's initial
decision and reaffirmed its decision denying Wasserman's request for his military
stipend to be deemed pension creditable. On March 10, 2023, the Board confirmed
this determination in a final administrative decision. The Board found Wasserman
was hired by the District under a salary contract and any compensation received
beyond the contractually designated amount was considered extra compensation and
not pension creditable pursuant to N.J.A.C. 17:3-4.1(a)(1)(x) (2015). The Board
also relied on N.J.A.C. 17:3-4.1(j) (2015), which provides stipends can be deemed
pension creditable only when they are included as part of a regular payroll check.
Since Wasserman received two separate checks, the Board found the military stipend
was not creditable towards his pension pursuant to N.J.A.C. 17:3-4.1(j) (2015). This
appeal follows.
II.
On appeal, Wasserman argues the Board's March 10, 2023 final
administrative decision should be reversed and we should deem the entirety of
his MIP to be pension-creditable compensation under N.J.A.C. 17:3-4.1(j)
(2015) because all of his JROTC functions were regular contractual job duties.
A-2314-22 6 Wasserman argues pursuant to N.J.S.A. 52:14B-10(c), the Board erroneously
rejected certain of the ALJ's findings of fact.
Substantial deference is given to "the agency charged with enforcing an
act." Merin v. Maglaki, 126 N.J. 430, 436-37 (1992). "The agency's
interpretation will prevail provided it is not plainly unreasonable." Id. at 437.
Thus, we "review[] agency decisions under an arbitrary and capricious
standard." Zimmerman v. Sussex Cnty. Educ. Servs. Comm'n, 237 N.J. 465,
475 (2019). "An administrative agency's final quasi-judicial decision 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." In re Herrmann, 192
N.J. 19, 27-28 (2007); see also Saccone v. Bd. of Trs. of the Police & Firemen's
Ret. Sys., 219 N.J. 369, 380 (2014) (quoting Russo v. Bd. of Trs., Police &
Firemen's Ret. Sys., 206 N.J. 14, 27 (2011)). The party challenging the
administrative action bears the burden of making this showing. Lavezzi v. State,
219 N.J. 163, 171 (2014).
The factual "findings of an ALJ 'are considered binding on appeal, when
supported by adequate, substantial and credible evidence.'" Oceanside Charter
Sch. v. N.J. State Dep't of Educ., 418 N.J. Super. 1, 9 (App. Div. 2011) (quoting
In re Taylor, 158 N.J. 644, 656 (1999)). "Although we review administrative
A-2314-22 7 decisions with a deferential standard of review, 'a reviewing court is in no way
bound by [an] agency's interpretation of a statute or its determination of a strictly
legal issue.'" State Shorthand Reporting Servs. v. N.J. Dep't of Lab. &
Workforce Dev., 478 N.J. Super. 13, 20-21 (App. Div. 2024) (alteration in
original) (quoting Allstars Auto Grp., Inc. v. N.J. Motor Vehicle Comm'n, 234
N.J. 150, 158 (2018)). "'[If] an agency's determination . . . is a legal
determination, the appellate court's review is de novo.'" Id. at 21 (alteration in
original) (quoting K.K. v. Div. of Med. Assistance & Health Servs., 453 N.J.
Super. 157, 161 (App. Div. 2018)).
III.
Wasserman's MIP is paid to him by the federal government through the
District pursuant to 10 U.S.C. § 2031(d) (2022) (amended Dec. 22, 2023), which
stated in pertinent part
[T]he Secretary of the military department . . . may authorize qualified institutions to employ, as administrators and instructors in the program, retired officers and noncommissioned officers . . . whose qualifications are approved by the Secretary and the institution concerned and who request such employment, subject to the following:
(1) A retired member so employed is entitled to receive the member's retired or retainer pay without reduction by reason of any additional amount paid to the member by the institution
A-2314-22 8 concerned. In the case of payment of any such additional amount by the institution concerned, the Secretary of the military department concerned shall pay to that institution the amount equal to one-half of the amount paid to the retired member by the institution for any period . . . .
The statutory and regulatory framework governing teachers' pensions
under New Jersey law sets forth what amounts are pension-creditable
compensation. N.J.S.A. 18A:66-2(d)(1) specifies that creditable compensation
is
the contractual salary, for services as a teacher as defined in this article, which is in accordance with established salary policies of the member's employer for all employees in the same position but shall not include individual salary adjustments which are granted primarily in anticipation of the member's retirement or additional remuneration for performing temporary or extracurricular duties beyond the regular school day or the regular school year.
Furthermore, N.J.A.C. 17:3-4.1 (2015) (amended May 1, 2023)
stated
(a) The compensation of a member subject to pension and group life insurance contributions and creditable for retirement and death benefits in the Fund shall be limited to base salary, and shall not include extra compensation.
1. Forms of compensation that have been identified as extra compensation include, but are not limited to:
A-2314-22 9 ....
xix. Compensation paid for additional services performed during a normal duty assignment, which are not included in base salary.
....
(c) Extra compensation shall not be considered creditable for benefits and all employee contributions made thereon shall be returned without interest.
N.J.A.C. 17:3-4.1(j) (2015) specifically addresses stipends and states:
The Board may consider a stipend as creditable compensation and subject to pension deductions for retirement credit, if it:
1. Is included as part of the petitioner's regular payroll check; and
2. Represents duties not addressed in base compensation that are integral to the effective functioning of the member's contracted position.
We find no error in the Board's final determination that Wasserman's
military stipend is not pension-creditable compensation based on the governing
New Jersey statute and administrative code provisions. "'To determine the
Legislature's intent, [courts] look to the statute's language and give those terms
their plain and ordinary meaning,' because 'the best indicator of that intent is the
plain language chosen by the Legislature.'" State v. J.V., 242 N.J. 432, 442
A-2314-22 10 (2020) (first quoting DiProspero v. Penn, 183 N.J. 477, 492 (2005); and then
quoting Johnson v. Roselle EZ Quick LLC, 226 N.J. 370, 386 (2016)).
Accordingly, if the language is clear as to the application of the statute, there
need be no further interpretation undertaken by the courts. In re Expungement
Application of D.J.B., 216 N.J. 433, 440 (2014).
The plain language of N.J.S.A. 18A:66-2(d)(1) defines pension-creditable
compensation as "the contractual salary, for services as a teacher as defined in
this article." Additionally, under N.J.A.C. 17:3-4.1 (2015) only a member's base
salary shall be subject to pension contributions. Wasserman's contractual base
salary is $59,105. Thus, according to the governing statute and the applicable
administrative code provision, only Wasserman's base salary is subject to
pension credit.
Wasserman argued and the ALJ found that Lyle v. Commissioner, 76 T.C.
668, 675 (1981), was a non-binding federal tax court case which is inapplicable
to this matter. We find no error in the Board's reliance on the general language
in Lyle reiterating that under 10 U.S.C. § 2031(d)(1) (2022) "employing
educational institution[s] [are] free to determine the []schedule of pay" and "that
they must pay the instructors the full 'additional amount' specified in the statute."
Id. at 674. Nor do we find error in the Board's conclusion that our decision in
A-2314-22 11 Siri v. Bd. of Trs. of the Tchrs' Pension and Annuity Fund, 262 N.J. Super. 147
(App Div. 1993), is distinguishable since, in that decision, we did not address
the creditability of a federally funded stipend to a State pension.
Wasserman argues in the alternative that the ALJ properly found N.J.A.C.
17:3-4.1(j) (2015) operated to deem his military stipend pensionable. We are
unconvinced and find no error in the Board's determination that both prongs of
N.J.A.C. 17:3-4.1(j) (2015) were not satisfied. We reject Wasserman's
alternative argument his military stipend is pension creditable because he is
being paid for duties not included in his base compensation but are integral to
the effective functioning of his contractual position as a military science teacher.
The record establishes Wasserman's job description requires him to perform
JROTC duties that occur outside of normal business hours. Thus, Wasserman
is already contractually compensated for those after-hours duties through his
base salary.
Our analysis is unchanged even if we were to find that the military stipend
was intended to compensate Wasserman for duties not addressed in his base
compensation but integral to his contracted position. Wasserman does not
satisfy the first subsection of N.J.A.C. 17:3-4.1(j) (2015), which requires
payment of the stipend and regular earnings in the same check in order to be
A-2314-22 12 considered pensionable. It is undisputed the District issues two separate bi-
weekly paychecks to Wasserman, one designated "regular earnings" and one
labeled "military stipend." Therefore, in this instance, N.J.A.C. 17:3-4.1 (2015)
cannot be applied to transform the military stipend paid by the federal
government into TPAF pension-creditable compensation.
IV.
We briefly address Wasserman's argument the Board improperly rejected
the ALJ's factual finding that his prior employer, the Jersey City Public School
District (Jersey City), considered the military stipend remitted to him as pension
creditable.
"When an ALJ has made factual findings by evaluating the credibility of
lay witnesses, the Pension Board may no longer sift through the record anew to
make its own decision, which will be affirmed if it is independently supported
by credible evidence." Cavalieri v. Bd. of Trs. of Pub. Emps. Ret. Sys., 368 N.J.
Super. 527, 534 (App. Div. 2004). "[I]n order to reverse such a factual finding
by an ALJ, the agency head must explain why the ALJ's decision was not
supported by sufficient credible evidence or was otherwise arbitrary." Ibid.
(citing N.J.S.A. 52:14B-10(c)).
A-2314-22 13 The record before the ALJ established Wasserman worked for Jersey City
as a JROTC instructor before his employment by the District. During the OAL
hearing, only Wasserman testified he received pension credit for his military
stipend while employed by Jersey City.
The Board rejected the ALJ's factual finding and its legal import by
stating:
The Board rejects the finding that [Wasserman's] full salary from Jersey City, including a military stipend, was credited to his TPAF account for pension purposes due to the self-serving nature of the statement and in the absence of any evidence. In addition, what was or was not reported . . . as pensionable from Jersey City is not germane to the Paterson matter. And, even if Jersey City incorrectly credited [Wasserman's] military stipend to his TPAF account, such error should not be compounded by continuing to grant pension credit based on an uncreditable military stipend.
Whether or not the Board erred in rejecting the ALJ's factual finding, we
remain unconvinced the evidence is relevant to our decision here. Other than
Wasserman's unsupported statement, the factual circumstances under which
Jersey City considered the entirety of Wasserman's salary pensionable were not
developed in the record here. Even if they were, the actions of another employer
do not inform our decision.
A-2314-22 14 In reviewing all the relevant circumstances and prevailing New Jersey
law, we find no error in the Board's final determination that the military stipend
being paid to Wasserman by the District is not creditable towards his TPAF
pension.
Affirmed.
A-2314-22 15