                NOT FOR PUBLICATION WITHOUT THE
               APPROVAL OF THE APPELLATE DIVISION

                                  SUPERIOR COURT OF NEW JERSEY
                                  APPELLATE DIVISION
                                  DOCKET NO. A-1979-14T3



BRICK TOWNSHIP PBA LOCAL 230
                                      APPROVED FOR PUBLICATION
and MICHAEL SPALLINA,
                                           June 21, 2016
     Plaintiffs-Appellants,
                                        APPELLATE DIVISION
v.

TOWNSHIP OF BRICK,

     Defendant-Respondent.
___________________________________

         Argued May 16, 2016 – Decided June 21, 2016

         Before Judges Lihotz, Fasciale and Higbee.

         On appeal from Superior Court of New Jersey,
         Law Division, Ocean County, Docket No. L-
         2815-13.

         Stephen B. Hunter argued the cause for
         appellants (Detzky, Hunter & DeFillippo,
         LLC, attorneys; Mr. Hunter, of counsel and
         on the brief).

         Louis N. Rainone argued the cause for
         respondent (DeCotiis, FitzPatrick & Cole,
         LLP, attorneys; Mr. Rainone and Victoria A.
         Flynn, of counsel and on the brief).

         Paul L. Kleinbaum argued the cause for
         amicus curiae New Jersey State Policemen's
         Benevolent Association (Zazzali, Fagella,
         Nowak, Kleinbaum & Friedman, attorneys; Mr.
         Kleinbaum and Marissa A. McAleer, of counsel
         and on the brief).
       The opinion of the court was delivered by

FASCIALE, J.A.D.

       In   this    declaratory         judgment      action,     Brick    Township     PBA

Local 230 (PBA Local 230) and Michael Spallina (collectively

plaintiffs)        appeal    from      a    November      13,    2014    order   granting

summary     judgment        to   the       Township      of    Brick    (the    Township).

Spallina retired as a police officer on accidental disability.

The order required Spallina to contribute to the cost of his

health insurance provided as a benefit along with disability

retirement     payments.            The      judge     concluded        that    Spallina's

obligation was required by N.J.S.A. 40A:10-21.1, L. 2011, c. 78,

§ 42, effective June 28, 2011 (Chapter 78).

       Plaintiffs argue Chapter 78 does not require Spallina to

make   contributions         towards        the   cost    of    his    health    insurance

premiums because his retirement was due solely to a disability.

The Township contends Chapter 78 excludes from the obligation to

contribute     to    the     cost      of   health     care     benefits,      only   those

employees completing twenty or more years of public service by

the effective date of Chapter 78.                     We granted amicus status to

the New Jersey State Policemen's Benevolent Association (State

PBA), which urges we reverse the court's decision, emphasizing

Chapter 78 does not require any public employee who retires with




                                              2                                   A-1979-14T3
disability retirement benefits to make contributions towards the

cost of his or her health care insurance premiums.

       We    hold     that   Chapter      78       does    not      require    ordinary      or

accidental       disability     retirees           to     make    premium      payments     for

health      insurance      benefits.       Therefore,             we   reverse      the   order

under       review,       remand,   and        direct         the      judge    to    address

plaintiffs' contention, raised in the complaint, that Spallina

is    entitled      to    reimbursement        for      his      prior     health    insurance

premium contributions.

                                           I.

       PBA Local 230 is the recognized majority representative for

all non-supervisory police officers employed by the Township.

Spallina worked as a Township police officer from 1994 to 2012.

The    Township,      a    municipal   corporation,               is   a   public    employer

within the meaning of the New Jersey Employer-Employee Relations

Act, N.J.S.A. 34:13A-1 to -14.

       PBA Local 230 and the Township were parties to a collective

negotiations agreement (CNA) covering terms and conditions of

police officers within the Township from January 2012 through

December 2015.           Article XI, Paragraph 9 of the CNA provides:

              Any Officer who retires from the Township
              shall   no   longer   have  health insurance
              premium sharing responsibilities, except as
              in    accordance    with   Chapter  2    and
              supplemented by Chapter 78 of Public Law
              2011.



                                               3                                      A-1979-14T3
The     Township   is    self-insured         and    its        health      insurance     is

administered by Horizon Blue Cross.                      The provision for health

insurance coverage for employees and retirees, and the premium

sharing requirements for employees and retirees, is governed by

N.J.S.A. 40A:10-16 to -25.

       In January 2011, Spallina sustained injuries in the line of

duty.     He applied for accidental disability retirement.                         The New

Jersey    Division      of    Pensions    approved            Spallina's     application,

effective October 1, 2012.

       The   Township        advised   Spallina          he    must    continue     making

health insurance premium contributions to maintain his retiree

health benefits coverage, based on Chapter 78.                         According to the

Township,    the   obligations         imposed      by    Chapter      78    extended     to

individuals who retired, whether because of years of service or

disability.

       Plaintiffs filed this declaratory judgment action pursuant

to N.J.S.A. 2A:16-51 to -62, seeking a declaration from the

court that Chapter 78 and Article XI, Paragraph 9 of the CNA do

not require Spallina to continue making health insurance premium

contributions      to    the     Township      because          he    was    receiving      a

disability retirement.           Plaintiffs also sought reimbursement for

past     health    contributions         remitted.               The     parties      filed




                                          4                                        A-1979-14T3
stipulated facts and agreed adjudication would be by summary

judgment.

     The judge conducted oral argument, entered the order under

review, and rendered a written opinion.                        The judge found the

text of Chapter 78 to be clear and unambiguous.                           He concluded

Chapter 78 exempted only employees with twenty or more years of

service    from     the    imposed    contribution         requirement.           Because

Spallina    had     less    than    twenty       years    of    service,        the   judge

concluded he was not entitled to Chapter 78's exemption.

     On appeal, plaintiffs and the State PBA argue that the

premise of the judge's conclusion, that Chapter 78 applies to

disabled    retirees,       is     fundamentally         flawed.         They    maintain

government employees who receive disability retirement benefits

are not subject to Chapter 78, no matter their years of service.

Accordingly, plaintiffs and the State PBA contend Spallina is

relieved from health insurance premium sharing responsibilities

pursuant to Article XI, Paragraph 9 of the CNA.

                                          II.

     The primary issue on appeal is whether Chapter 78 applies

to   government      employees       who        receive    disability       retirement

benefits.     This is a matter of statutory interpretation to which

we   accord    no    deference       to    the     trial       judge's    interpretive

conclusions.        Commerce Bancorp, Inc. v. InterArch, Inc., 417




                                           5                                      A-1979-14T3
N.J.   Super.    329,     334   (App.     Div.      2010)      (citation     omitted),

certif. denied, 205 N.J. 519 (2011); see also Manalapan Realty,

L.P. v. Twp. Comm., 140 N.J. 366, 378 (1995) (indicating that

"[a]   trial    court's    interpretation          of    the   law    and    the    legal

consequences that flow from established facts are not entitled

to any special deference" (citations omitted)).

       Our   paramount     goal   in      interpreting          a    statute       is    to

ascertain the Legislature's intent, and "generally[] the best

indicator of that intent is the statutory language."                         DiProspero

v. Penn, 183 N.J. 477, 492 (2005) (citation omitted).                                   When

interpreting a statute, we give words "their ordinary meaning

and significance."        Tumpson v. Farina, 218 N.J. 450, 467 (2014)

(quoting DiProspero, supra, 183 N.J. at 492).                          Only when the

statutory      language    is   ambiguous          and   yields       more   than       one

plausible interpretation do we turn to extrinsic sources, such

as legislative history.         DiProspero, supra, 183 N.J. at 492-93.

                                        A.

       The   language     in    Chapter       78    plainly         identifies      which

employees are subject to its requirements.                      Therefore, we need

not turn to extrinsic sources to resolve the issue on appeal.

State v. Shelley, 205 N.J. 320, 323 (2011) (stating that "[w]hen

the Legislature's chosen words lead to one clear and unambiguous




                                          6                                    A-1979-14T3
result, the interpretive process comes to a close, without the

need to consider extrinsic aids" (citation omitted)).

     N.J.S.A. 40A:10-21.1 states, in part:

          (1) Notwithstanding the provisions of any
          other law to the contrary, public employees
          of an employer, as those employees are
          specified    in   paragraph  (2)    of   this
          subsection, shall contribute, through the
          withholding of the contribution from the
          monthly retirement allowance, toward the
          cost of health care benefits coverage for
          the employee in retirement and any dependent
          provided pursuant to N.J.S.[A.] 40A:10-16
          [to   -34.3],   unless   the  provisions   of
          subsection c. of this section apply, in an
          amount    that   shall   be   determined   in
          accordance with [N.J.S.A. 52:14-17.28c]
          . . . .

          (2) The contribution specified in paragraph
          (1) of this subsection shall apply to:

               (a) employees of employers for
               whom     there    is   a    majority
               representative     for    collective
               negotiations purposes who accrue
               the number of years of service
               credit, and age if required, as
               specified in N.J.S.[A.] 40A:10-
               23,[1] or on or after the expiration

1
    Pursuant to N.J.S.A. 40A:10-23(a), effective May 21, 2010, an
employer was given discretion to

          assume the entire cost . . . of such
          coverage and pay all . . . of the premiums
          for employees a. who have retired on a
          disability pension, or b. who have retired
          after 25 years or more of service credit in
          a State or locally administered retirement
          system and a period of service of up to 25
          years with the employer at the time of
                                                    (continued)


                                7                         A-1979-14T3
              of     an     applicable      binding
              collective negotiations agreement
              in force on that effective date,
              and who retire on or after that
              effective date or expiration date,
              excepting    employees    who   elect
              deferred   retirement,     when   the
              employer    has    assumed    payment
              obligations     for    health    care
              benefits in retirement for such an
              employee; and

                     . . . .

         (3) Employees described in paragraph (2) of
         this subsection who have [twenty] or more
         years of creditable service in one or more
         State   or  locally-administered  retirement
         systems on the effective date of P.L. 2011,
         c. 78 shall not be subject to the provisions
         of this subsection.

         [N.J.S.A.    40A:10-21.1(b)(1)-(3)   (emphasis
         added).]

    The judge concluded that

         [t]he plain text of Chapter 78 is clear and
         unambiguous.   Employees who have creditable
         service of twenty or more years in one of
         the retirement systems on the effective date
         of Chapter 78 were exempted from the
         contribution requirements. Michael Spallina
         was an employee with less than twenty years
         of creditable service on June 28, 2011, the
         effective date of Chapter 78.     [Spallina]
         was approved by [the Police and Firemen's
         Retirement   System   (PFRS)] for   .  .   .



(continued)
          retirement, . . . or c. who have retired and
          reached the age of 65 years or older with 25
          years or more of service credit in a State
          or locally administered retirement system.



                                8                         A-1979-14T3
            accidental disability        retirement   after    the
            effective date.

    We respectfully disagree with the judge's interpretation of

the scope of Chapter 78.        First, subsection (b)(1) specifies

that "employees of an employer" must contribute to the cost of

health   care   benefits.     The    subsection       provides    a    precise

definition of "employees," namely those "specified in paragraph

(2) of this subsection."      For "employees of employers for whom

there is a majority representative for collective negotiations

purposes," paragraph two, in turn, states that the contribution

requirement applies specifically to employees

            who accrue the number of years of service
            credit, and age if required . . . or on or
            after   the   expiration  of   an  applicable
            binding collective negotiations agreement in
            force on that effective date, and who retire
            on   or   after   that   effective  date   or
            expiration date, excepting employees who
            elect deferred retirement, when the employer
            has assumed payment obligations for health
            care benefits in retirement for such an
            employee.

            [N.J.S.A. 40A:10-21.1(2)(a).]

Paragraph    three   then   carves       out   from   the     definition      of

"employees" in paragraph two those who accrued twenty or more

years of service by the effective date of Chapter 78, who need

not contribute to their health insurance premiums.                   Thus, the

plain language of Chapter 78 does not include employees who

retire based on disability; instead, it offers a circumscribed



                                     9                                A-1979-14T3
definition    of   the   employees      intended      to   be    affected           by    the

implementation of the statute, namely those who retire based on

meeting the service requirements.

                                         B.

    While     we   conclude     that    a     plain   reading        of    the      statute

resolves the issue, extrinsic evidence bolsters our conclusion

that the Legislature did not intend for disability retirees to

contribute    to   their    health       insurance       premiums          pursuant        to

Chapter 78.

    "The State-administered retirement systems are funded by:

1) contributions from employees' wages; 2) contributions from

the State, as the employer; and 3) the return earned on invested

assets."     Berg v. Christie, 436 N.J. Super. 220, 231 (App. Div.

2014)   (citations    omitted),        rev'd,    __   N.J.      __    (2016).            PFRS

members contribute a fixed percentage of their wages to the

pension fund, which is then paid out to them upon retirement

along with the State's designated contribution.                       "PFRS pensions

. . . are dependent upon years of service, age and contributions

to the pension fund."         Sternesky v. Salcie-Sternesky, 396 N.J.

Super. 290, 300 (App. Div. 2007) (citing N.J.S.A. 43:16A-6).

N.J.S.A. 43:16A-5 governs service retirees, and sets forth when

an employee may retire based on length of service.                             The statute

provides   employees     over   fifty-five        "may     retire         on    a   service




                                         10                                         A-1979-14T3
retirement      allowance,"      which     is    calculated     in        light    of    the

member's      total     contribution     and    years     of   service.           N.J.S.A.

43:16A-5(1)-(2).          The statute also mandates sixty-five-year-old

and over employees "shall be retired on a service retirement

allowance . . . , except that a member hired prior to January 1,

1987 may remain a member of the system until the member attains

age 68 years or 25 years of creditable service, whichever comes

first."       N.J.S.A. 43:16A-5(1).

    The system is designed for individuals to pay into the fund

from their individual wages, from which they will receive a

service retirement allowance after reaching the requisite age or

years    of    service.      However,     this    formula      does       not     work   for

individuals who become disabled on the job prior to reaching the

length    of    service     or   age   requirements.           As     a    result,       the

legislature         designated     different        statutory         sections           for

employees disabled while on the job.                    Without the independent

treatment of a separate statute, disabled employees would not be

entitled       to   a    pension   for      failure       to   meet        the     service

requirements.

    N.J.S.A.          43:16A-6   governs       ordinary    disability           retirement

benefits, which arise when a member under fifty-five (and thus

ineligible for service retirement) with at least four years of

service becomes mentally or physically incapacitated and unable




                                          11                                       A-1979-14T3
to perform his or her duties.                       Although an employee seeking

ordinary disability retirement must have a minimum of four years

of service, N.J.S.A. 43:16A-6(1), the employee is retiring due

to    a    disability,      not   his    or     her      length       of   service   or       age.

N.J.S.A. 43:16A-7 controls accidental disability retirement, for

which there is no years of service or age requirement; rather,

any   member    may    qualify      so    long        as   he    or    she    satisfies        the

statutory      criteria.          N.J.S.A.          43:16A-7(1).              This      is     why

accidental disability retirees receive an "enhanced benefit" of

two-thirds of their salary at the time of the occurrence of the

accident, whereas ordinary retirees receive one-half of their

final salary if they retire at the earliest time.                                 Sternesky,

supra, 396 N.J. Super. at 300.                  In short, ordinary retirement is

linked to a member's age or years of service, whereas disability

retirement is awarded because of an employee's disability.

          Chapter 78 was passed in recognition of "serious fiscal

issues"      confronting      the       State      and     the    underfunding          of     the

pension system.          DePascale v. State, 211 N.J. 40, 63 (2012).

Chapter 78 increased required contributions from employees and

suspended      cost-of-living       adjustments.                The    Senate     Budget       and

Appropriations        Committee          Statement,         dated          June   16,        2011,

elaborates      on    the    legislative           intent        of    Chapter    78.          The

committee explained that:




                                              12                                        A-1979-14T3
         This bill makes various changes to the
         manner in which . . . the Police and
         Firemen's Retirement System (PFRS) . . .
         operate[s] and to the benefit provisions of
         th[e] system[].

               . . . .

         This bill requires all public employees and
         certain public retirees to contribute toward
         the cost of health care benefits coverage
         based upon a percentage of the cost of
         coverage.

               . . . .

         Similar provisions in the bill apply to
         retirees of the State . . . and units of
         local government who accrue 25 years of
         service after the bill's effective date, or
         on or after the expiration of an applicable
         collective bargaining agreement in effect on
         that date, and retire after that, who will
         be required to contribute a percentage of
         the cost of health care benefits coverage in
         retirement, but as based on their retirement
         benefit. These provisions will not apply to
         public employees who, on the effective dated
         [sic] the bill, have 20 or more year[s] of
         service in one or more State or locally-
         administered retirement systems.      A 1.5%
         "floor", for those retirees to whom the 1.5%
         contribution in current law applies, will
         also be applicable to these retirees.

         [S.B. No. 2937, at 118,     120-21   (June   16,
         2011) (emphasis added).]

    The Senate Committee's Statement bolsters the conclusion

that Chapter 78 applies only to service retirees and not to

disability   retirees.   The   Statement   makes   clear    the   new

provisions apply to active public employees and retirees "who




                               13                           A-1979-14T3
accrue 25 years of service after the bill's effective date,"

while exempting those who "have 20 or more year[s] of service"

by    the    bill's     effective    date.         Ibid.        As    aforementioned,

disability retirement is not predicated on length of service or

age, and the Senate Committee's omission of disability retirees

suggests      the      Legislature's      intent    was    to    mandate      "regular"

retirees based on service credit and age to contribute towards

their health care benefits via withholdings from their pension

benefits.

       Examining the PFRS statute in its totality, including the

amendments provided in Chapter 78, leads to the conclusion that

the    Legislature          sought   to     have    active       public       employees

contribute to the cost of their healthcare premiums, as well as

retiring employees who will accrue twenty-five years of service

after Chapter 78 became effective, carving out those who already

accumulated twenty years of service as of the effective date.

This system encapsulates employees on the ordinary course for

retirement.         Public employees who retire on disability benefits,

like Spallina, do not retire pursuant to years of service credit

or reaching a certain age, which is why disability retirees are

accorded separate statutory treatment.                Instead, these employees

retire      due   to    a   disability,    which,    as    the       Senate   Committee




                                           14                                  A-1979-14T3
Statement suggests, places them outside of the scope of Chapter

78.

       We consider as further insight into the issue on appeal a

letter     from      the   Assistant        Director   of   New        Jersey    Public

Employees'      Health     Benefit    Programs,     Division      of    Pensions      and

Benefits.       See Paterson PBA Local 1 v. City of Paterson, 433

N.J. Super. 416, 429 (App. Div. 2013) (allowing the court to

consider agency answers to "FAQs" as a "practical interpretation

of the statute," even though they were "not the equivalent of an

administrative         agency's      interpretation").             The       Assistant

Director explained in a letter dated July 8, 2013 that "[s]ince

Chapter 78 refers to individuals who attain the required years

of    pension     membership   credit       as   outlined   in     N.J.S.A.      52:14-

17.28, [Chapter 78] appears to intentionally exclude those who

retire on a disability retirement benefit."                    Similarly, the New

Jersey Division of Pensions and Benefits published "Fact Sheet

#11," which consistently interprets Chapter 78 by stating, in

pertinent part, "[l]ocal employees who retire on an approved

disability retirement . . . are not subject to the contribution

provisions      of   Chapter   78."         This   extrinsic     evidence       further

supports    our      conclusion      that    Chapter   78   does       not   encompass

disability retirees.




                                            15                                  A-1979-14T3
                                 III.

    In conclusion, the plain language of Chapter 78 exempts

disability retirees from health insurance premium contributions.

Chapter   78's   legislative     history,   as   well   as    agency

interpretations, further bolster our conclusion.

    As a result, we reverse the order under review, remand, and

direct the judge to address plaintiffs' contention, raised in

the complaint but not adjudicated, that Spallina is entitled to

reimbursement for prior health insurance premium contributions.

We do not retain jurisdiction.




                                  16                         A-1979-14T3
