Chiarello v. Board of Trustees, Public Employees’ Retirement System
March 01, 2023
Labor and Employment – Employee Benefits
By: Judith Nallin
Chiarello v. Board of Trustees, Public Employees’ Retirement System, A-1199-11T1; Appellate Division; opinion by Fisher, P.J.A.D.; decided and approved for publication December 20, 2012. Before Judges Fisher, Waugh and St. John. On appeal from the Department of Treasury, Division of Pensions and Benefits,, PERS #917412. DDS No. 25-2-xxxx [11 pp.]
In February 2011, appellant Francis Chiarello, a multiple member of the Public Employees’ Retirement System, submitted an application for an ordinary disability retirement from his position with the South Jersey Transportation Authority, effective March 1, 2011, intending to remain mayor of Buena Vista Township, his other PERS position. At the suggestion of a representative of the Division of Pensions and Benefits, he changed the application date to Aug. 1, 2011.
A few weeks later, the division advised Chiarello that N.J.A.C. 17:2-6.1 required that he retire from all covered positions and that he be totally and permanently disabled from all job-related duties. The PERS board them declined to process his application without his retirement from is elected position.
Chiarello sought reconsideration, asserting, inter alia, that N.J.S.A. 43:15A-47.2 allowed him to retain his elected position while collecting a disability pension. The board reaffirmed its prior denial, opining that (1) N.J.S.A. 43:15A-42, which governs ordinary disability retirements, and N.J.A.C. 17:2-6.1, which provides guidelines for retirement applications, require that multiple PERS members terminate all such positions to be eligible to retire on an ordinary disability pension; (2) Chiarello’s continued employment as mayor belied his claim that he was totally and permanently disabled; and (3) the Legislature, in the interim, by way of Chapter L. 2011, c. 78, repealed the part of § 47.2 on which Chiarello claimed his entitlement to remain as mayor, Chiarello appealed.
Held: Simple fairness and the well-established principle that favors prospective application of statutes require that Chiarello’s retirement application be governed by the laws existing at the time of its submission. The matter is remanded to determine if appellant can be totally and permanently disabled from one position without being similarly disabled from the other.
The panel observes that Chiarello submitted his application four months before § 47.2’s repeal, intending that his retirement would also occur before the repeal. It was only at the division’s suggestion that his target retirement date was altered to a date beyond the repeal’s effective date. The panel says simple fairness – let alone the well-established principle that favors prospective application of statutes – requires that his application he governed by the laws existing at the time he applied.
The panel rejects the board’s contention that the Legislature intended Chapter 78 to apply to all those who had not been granted a retirement pension, including those with an application pending at the time of its effective date. It says due process principles and notions of fundamental fairness require rejection of the outcome urged by the board. A change in the law during a delay in the processing of a retirement application – when the delay was based on the Board’s mistaken legal interpretation of existing law – should not deprive an employee of the benefits that were promised when he entered public employment and that remained due when he sought to retire.
The panel says to hold otherwise could lead to mischievous results. Deliberate foot-dragging or other unwarranted delays in the processing of an application pending a legislative limitation on an employee’s existing rights could lead to inequitable results. The panel says nothing in the legislation exiting at the time of the application, or now, suggests that the Legislature intended that the scope of its laws in this arena should be governed by the speed at which retirement applications are processed, and it declines to impress such an unworkable condition on the reach of Chapter 78. Therefore, the repeal of § 47.2 has no bearing on Chiarello’s retirement application.
The panel also rejects the board’s argument that § 47.2 does not, and never did, apply to disability retirements because the statutes governing ordinary and accident disability retirements appear in separate locations in New Jersey Statutes Annotated, i.e., N.J.S.A. 43:15A-42 to -46, while 43:15A-47, and therefore § 47.2, deals with retirements for age. The panel notes that the Legislature has directed, as a general matter, that the particular arrangement of statutes is for reference and orderly presumption of a legislative construction should be drawn from the arrangement.
Finally, the panel remands for consideration of the question the board posed but did not decide: whether Chiarello could be totally and permanently disabled from his employment with SJTA while not at the same time be similarly disabled from his position as mayor.
For appellant – John D. Feeley (Feeley & Sayegh and The Blanco Law Firm; Feeley and Pablo N. Blanco on the brief). For respondent – Robert H. Stoloff, Assistant Attorney General(Jeffrey S. Chiesa, Attorney General; Lewis A. Scheindlin, Assistant Attorney General, of counsel).
