In re Puglisi

• Decision Date: 17 May 2006
• Citation: 897 A.2d 1015,186 N.J. 529
• Parties: In the Matter of Anthony F. PUGLISI, Jr.
• Court: New Jersey Supreme Court

897 A.2d 1015

186 N.J. 529

In the Matter of Anthony F. PUGLISI, Jr.

Supreme Court of New Jersey.

Argued April 4, 2006.

Decided May 17, 2006.

Fredric J. Gross argued the cause for appellant Anthony F. Puglisi, Jr.

Susanne Culliton, Deputy Attorney General, argued the cause for respondent Board of Trustees, Police and Firemen's Retirement System (Zulima V. Farber, Attorney General of New Jersey, attorney; Michael J. Haas, Assistant Attorney General, of counsel; Christine R. Lucarelli, Deputy Attorney General, on the brief).

PER CURIAM.

Petitioner Anthony F. Puglisi, Jr. served as a police officer for the Police Department of the City of New Brunswick from 1965 until his retirement in 1999. In 1990, Puglisi, who was a lieutenant at the time, and several other police officers filed a civil rights lawsuit in federal court against various City administrators and elected officials alleging that those individuals engaged in political discrimination in violation of two federal civil rights statutes and the New Jersey Constitution. In 1998, Puglisi and his co-plaintiffs reached a settlement with the City as a result of which Puglisi was promoted to the rank of captain and immediately began a one-year terminal leave period at a captain's salary. Puglisi also agreed to retire at the end of the terminal leave period. Finally, Puglisi received $30,000 in compensatory damages. The parties agree that the settlement did not constitute an admission of wrongdoing by the City.

Puglisi retired from the police department as a captain on an age and service pension under the Police and Firemen's Retirement System (PFRS), N.J.S.A. 43:16A-1 to -68. He received credit with the PFRS for the year of terminal leave at a captain's salary and thereafter collected retirement checks reflecting the higher salary. Several months after his retirement, in a matter unrelated to Puglisi's discrimination lawsuit, an arbitrator settled the terms of a new collective negotiations agreement between the City and the New Brunswick Policemen's Benevolent Association. That agreement included a retroactive increase in base pay for all supervisory police and covered the period that Puglisi was on terminal leave. Although Puglisi was no longer on active service, he was deemed entitled to the increase because the arbitrator found that the increase should not be limited to officers on active service.

The City, however, refused to make the retroactive payment to Puglisi, thereby forcing him to seek relief in federal court to obtain the retroactive pay. The City complied with a federal court order and informed the PFRS of the additional terminal leave pay that was due to Puglisi. During the compliance process, the PFRS realized that Puglisi's pension included an increase of pensionable base salary reflecting his promotion to captain when, according to the PFRS, his payments should have been based only on his lieutenant's salary. That information was presented to the Committee on Creditable Salary, a committee appointed by the Board of Trustees of the PFRS (Board). After review of the matter, the Committee recommended to the Board that Puglisi "can collect the additional salary as captain, but the additional salary earned ... is not creditable in the PFRS as he was on terminal leave from the day he was promoted as captain to the date of his retirement."

Puglisi appealed the Committee's recommendation to the Board, arguing that he was entitled to a pension that included the increased captain's salary because he had settled his case against the City with the "expectation that his promotion would result in higher pension payments." In a letter decision, the Board characterized Puglisi's promotion as "severance pay" and informed him that although he could retain the previous pension overpayments, the Board would reduce his creditable salary, thereby denying him pension benefits based on a captain's salary.¹

Puglisi appealed the Board's decision, and the case was transmitted to the Office of Administrative Law. An Administrative Law Judge (ALJ) found that Puglisi's promotion was not in anticipation of retirement and ordered the Board to reinstate the higher pension payments. The Board rejected the ALJ's recommended decision, again found that Puglisi's promotion was in anticipation of retirement, and concluded that the promotion could not be considered in calculating his pension payments. Puglisi appealed, and the Appellate Division affirmed the Board's decision. We granted Puglisi's petition for certification, 185 N.J. 391, 886 A.2d 662 (2005), and now affirm.

I.

Employees that meet the statutory definition of a police officer, firefighter, and other specific personnel receive pensions and other benefits under the PFRS. N.J.S.A. 43:16A-1 to -68. In determining an individual's pension level, the Board is required by N.J.S.A. 43:16A-1(26) to exclude certain types of compensation:

"Compensation" shall mean the...