                NOT FOR PUBLICATION WITHOUT THE
               APPROVAL OF THE APPELLATE DIVISION

                                  SUPERIOR COURT OF NEW JERSEY
                                  APPELLATE DIVISION
                                  DOCKET NO. A-0083-11T2
                                              A-0099-11T2
                                              A-0123-11T2
                                              A-0124-11T2
                                              A-0157-11T2
                                              A-0158-11T2
                                              A-0159-11T2
                                              A-0195-11T2
                                              A-0208-11T2


I/M/O TOWN OF HARRISON AND
FRATERNAL ORDER OF POLICE, LODGE
NO. 116
___________________________________      APPROVED FOR PUBLICATION

I/M/O VERNON TOWNSHIP PBA LOCAL 285           April 15, 2015
CONTRACT
                                            APPELLATE DIVISION
___________________________________

I/M/O BOROUGH OF RAMSEY AND PBA
LOCAL NO. 155
___________________________________

I/M/O TOWNSHIP OF WOODBRIDGE AND
PBA LOCAL 38
___________________________________

I/M/O CITY OF LINDEN AND FMBA LOCAL
NO. 234
___________________________________

I/M/O TOWN OF HARRISON AND FMBA
LOCAL NO. 22
___________________________________

I/M/O TOWN OF HARRISON AND PBA
LOCAL NO. 22
___________________________________
I/M/O TOWN OF HARRISON AND FMBA
LOCAL NO. 22
____________________________________

I/M/O CITY OF LINDEN AND FMBA LOCAL 234

_______________________________________

         Argued September 17, 2014 – Decided April 15, 2015

         Before Judges Fuentes, Ashrafi and O'Connor.

         On appeal from the New Jersey Division of
         Pension and Benefits.

         Paul L. Kleinbaum argued the cause for
         appellant SOA 22A in A-0083-11 (Zazzali,
         Fagella,   Nowak,   Kleinbaum   &   Friedman,
         attorneys; Mr. Kleinbaum, on the brief).

         Markowitz & Richman, attorneys for appellant
         Town of Harrison and Fraternal Order of
         Police, Lodge No. 116 in A-0083-11 (Matthew
         D. Areman, on the brief).

         James M. Mets argued the cause for appellant
         Vernon   Township  Local  285   Contract  in
         A-0099-11 (Mets Schiro & McGovern, LLP,
         attorneys; Mr. Mets and Brian J. Manetta, on
         the brief).

         Paul L. Kleinbaum argued the cause for
         appellant Borough of Ramsay and PBA Local
         No. 155 in A-0123-11 (Zazzali, Fagella,
         Nowak, Kleinbaum & Friedman, attorneys; Mr.
         Kleinbaum and Marissa A. McAleer, on the
         brief).

         Paul L. Kleinbaum argued the cause for
         appellant Township of Woodbridge and PBA
         Local 38 in A-0124-11 (Zazzali, Fagella,
         Nowak, Kleinbaum & Friedman, attorneys; Mr.
         Kleinbaum and Marissa A. McAleer, on the
         brief).




                               2                         A-0083-11T2
          Daniel J. McCarthy argued the cause for
          appellant City of Linden and FMBA Local No.
          234 in A-0157-11 (John G. Hudak, City
          attorney, Mr. McCarthy, on the brief).

          Craig S. Gumpel argued the cause for
          appellant FMBA Local No. 234 in A-0157-11
          (Mr. Gumpel and Bassel Bakhos, on the
          brief).

          Craig S. Gumpel argued the cause for
          appellant Town of Harrison and FMBA Local
          No. 22 in A-0158-11 (Mr. Gumpel and Bassel
          Bakhos, on the brief).

          Paul L. Kleinbaum argued the cause for
          appellant Town of Harrison and PBA Local No.
          22 in A-0159-11 (Zazzali, Fagella, Nowak,
          Kleinbaum   &   Freidman,   attorneys;   Mr.
          Kleinbaum and Marissa A. McAleer, on the
          brief).

          Javerbaum, Wurgaft, Hicks, Kahn, Wikstorm &
          Sinns, attorneys for appellants in Town of
          Harrison and FMBA Local 22 in A-0195-11,
          join in the briefs of co-appellants.

          Craig S. Gumpel argued the cause for
          appellant City of Linden and FMBA Local 234
          in A-0208-11 (Mr. Gumpel and Bassel Bakhos,
          on the brief).

          Eileen   S.   Den   Bleyker,   Senior Deputy
          Attorney General, argued the cause for
          respondent New Jersey Division of Pensions
          and   Benefits   (John  J.   Hoffman, Acting
          Attorney General, attorney; Ms. Den Bleyker,
          on the brief).

          The opinion of the court was delivered by

FUENTES, P.J.A.D.

    In   this   opinion,   we   decide   nine   appeals   filed   by   five

municipalities and four collective bargaining agents (unions)



                                   3                              A-0083-11T2
that    represent    police         officers      and   firefighters           employed    by

these   municipalities.              Although     the    respective           functions    of

these    appellants           and     the     traditional          roles        they     have

historically played have cast them as antagonists, they speak

with one voice here.                These parties have mounted a collective

legal    challenge       to   the     Acting      Director    of       the     Division    of

Pensions and Benefits' decision to refuse to implement the final

determination       of    the       Board    of   Trustees        of    the     Police    and

Firemen's      Retirement       System      (PFRS    Board    of       Trustees),      which

found certain senior officer and longevity pay provisions in the

collective bargaining agreements entered into by appellants were

creditable       compensation        for    pension     purposes         under      N.J.S.A.

43:16A-1(26)(a).

       Thus,   to   be    clear,       we   do    not   decide         here    whether    the

particular       longevity          pay     provisions       in        these    collective

bargaining        agreements          constitute        creditable             compensation

benefits    as    defined       in    N.J.S.A.      43:16A-1(26)(a)            or   N.J.A.C.

17:4-4.1.      The singular legal question before us is this: Does

the Acting Director of the Division of Pensions and Benefits

have the legal authority to refuse to implement a final decision

of the PFRS Board of Trustees because the Acting Director has

independently concluded that the decision of the PFRS Board of

Trustees is legally incorrect?                    After reviewing the statutory




                                              4                                     A-0083-11T2
scheme      established     by     the    Legislature      in    the       Police    and

Firemen's Retirement System Act, N.J.S.A. 43:16A-1 to -68, and

the regulations promulgated by the PFRS Board of Trustees to

administer this system, we conclude the answer to this question

is unequivocally "no."

      The    Legislature     vested       the   PFRS   Board    of    Trustees      with

exclusive authority and "responsibility for the proper operation

of the retirement system."               N.J.S.A. 43:16A-13(a)(1).             Although

the   Division    of      Pensions       and    Benefits   has       the    power    and

responsibility       to     "investigate         increases       in        compensation

reported for credit which exceed reasonably anticipated annual

compensation increases for members of the retirement system[,] .

. . cases where a violation of the statute or rules is suspected

shall be referred to the Board."                N.J.A.C. 17:4-4.1(d) (emphasis

added).

      The PFRS Board of Trustees has the authority to "question

the   compensation     of    any    member      or   retiree    to    determine      its

credibility where there is evidence that compensation reported

as base salary may include extra compensation."                       N.J.A.C. 17:4-

4.1(b).      Only this court has the legal authority to overturn a

final decision of the PFRS Board of Trustees in the context of

an appeal filed by a member of the PFRS.                   See        N.J.A.C. 17:4-

1.7(a); R. 2:2-3(a)(2).            The action taken by the Acting Director




                                           5                                   A-0083-11T2
in the cases before us lacked statutory or regulatory authority

and was therefore ultra vires, without legal force or effect.

See   Lourdes   Med.   Ctr.   v.   Bd.       of    Review,     197    N.J.   339,    378

(2009).

      We start our factual recitation with a brief overview of

the   longevity    salary     increase            provisions     in    the    various

collective      bargaining         agreements            negotiated          by      the

municipalities    and    unions      that         have    appealed      the       Acting

Director's actions.

                                         I

                              Town of Harrison

      We have consolidated the following appeals affecting the

Town of Harrison: I/M/O Town of Harrison and PBA Local No. 22,

Docket No. A-0159-11; I/M/O Town of Harrison and FOP, Lodge No.

116, Docket No. A-0083-11; I/M/O Town of Harrison and FMBA Local

No. 22, Docket No. A-0158-11; and I/M/O Town of Harrison and

FMBA Local No. 22, PBA Local No. 22, and SOA 22A, Docket No. A-

0195-11.     The Fraternal Order of Police, Lodge No. 116 (FOP

Lodge 116), Police Benevolent Association, Local No. 22 (PBA

Local 22), and Firemen's Mutual Benevolent Association, Local

No. 22 (FMBA Local 22) filed briefs in support of these appeals

and join in each other's arguments.                  The Town of Harrison has




                                         6                                    A-0083-11T2
also joined in these appeals challenging the action taken by the

Acting Director.

                               Police Officers

      FOP Lodge 116 identifies itself as "a labor organization

and representative within the meaning of N.J.S.A. 34:13A-3(e)."

This appellant represents all uniformed officers in the Harrison

Police Department holding the ranks of Sergeant, Lieutenant and

Captain, for purposes of collective bargaining.                 In 2007, FOP

Lodge 116 was certified as the exclusive bargaining agent for

all   superior    officers     employed     by   Harrison.     FOP   Lodge   116

entered into a collective bargaining agreement with Harrison,

which was valid from January 1, 2007 through December 31, 2011.

Before 2007, PBA Local 22 represented police officers holding a

supervisory rank.

      Since      1999,   the      two       principal     bargaining    agents

representing superior officers in the Harrison Police Department 1

negotiated a provision in their collective bargaining agreements

allowing for increases to officers' base salary contingent upon

their years of service with the Town.                   This longevity clause

provides as follows:




1
   PBA Local 22 represented these officers from 1999 to 2007; FOP
Lodge 116 was the recognized bargaining agent from January 1,
2007 through December 31, 2011.



                                        7                              A-0083-11T2
           ARTICLE XVIII

           LONGEVITY

           Section 1:    In addition to wages, members
           shall receive longevity as follows:

           After three years:               Two (2%) percent

           After five years:               Four (4%) percent

           After ten years:                 Six (6%) percent

           After fifteen years:           Eight (8%) percent

           After twenty years:           Ten (10%) percent

           Start of twenty-three years:       Twelve       (12%)
           percent

           Start of twenty-four years:        Fourteen     (14%)
           percent

           Section 2: Longevity will be paid in weekly
           salaries.

    This     precise   language    was   adopted   in    the   Article    XV-

Longevity provision of the Harrison salary ordinance to mirror

the provisions contained in the parties' collective negotiations

agreement.      Article    XVIII   was    included,     verbatim,   in    the

contract between Harrison and PBA Local 22, effective January 1,

1999 through December 31, 2001.          By letter dated June 15, 2000,

Regina M. Trauner, the secretary of the PFRS Board of Trustees

at the time, formally advised Harrison that the PFRS Board of

Trustees found the "stipend referred to in Article XIX Workday




                                     8                              A-0083-11T2
of the agreement" was "not considered creditable for pension

purposes."

      Because Trauner did not mention the longevity provision in

her June 15, 2000 letter, Harrison and FOP Lodge 116 inferred

from this absence of criticism that the PFRS Board of Trustees

had tacitly approved the longevity provision.2                       According to FOP

Lodge 116, it and Harrison "continued to negotiate successor

agreements"   based      on   this   "tacit       approval      of    the     negotiated

longevity provision[.]"         Article XVIII remained in the 2007-2011

collective    bargaining       agreement      between          FOP    Lodge     116   and

Harrison.

      By letter dated January 21, 2011, Michael R. Czyzyk, the

Division's    Supervisor,       External         Audits,       informed       Harrison's

Chief Financial Officer (CFO) that the Division had determined

"that   the   longevity       compensation,         as     a    component       of    the

ordinance,    is   not    creditable        in    its      entirety       for    pension

purposes as per N.J.A.C. 17:2-4.1."3


2
   We must point out that prudence dictates that Harrison should
have been more proactive.   Under these circumstances, Harrison
should have obtained a formal statement from the PFRS Board of
Trustees confirming it had approved the specific longevity
provision.
3
    The relevant section of this regulation states:

            The compensation of a                member     subject to
            pension   and    group                 life       insurance
                                                                      (continued)


                                        9                                       A-0083-11T2
    As   explained   by    External    Audit   Supervisor   Czyzyk,   the

Division found

          that the longevity increment from 10% to 12%
          in the 23rd year of service and the
          longevity increment from 12% to 14% in the
          24[th]    year   of   service   incrementally
          excessive   compared   to  prior   increases.
          Also, granting such an increase in the 23rd
          and 24th year of an employee's service is
          clearly being awarded in order to enhance
          that member's retirement benefit.

Of particular relevance here, the Division also explained to

Harrison's CFO that this determination was merely an interim

step, subject to further scrutiny if the employees affected by

it exercised their rights to appeal:

          The   Division  will   not   implement   this
          Administrative determination until 90-days
          have elapsed from the date of this letter to
          permit any members who wish to appeal
          adequate time to do so.     Please provide a
          copy of this letter to all employees and
          retirees    who  are    affected   by   this


(continued)
          contributions and creditable for retirement
          and death benefits in the system shall be
          limited to base salary and shall not include
          extra compensation. Forms of compensation
          that   have   been   identified   as   extra
          compensation include, but are not limited
          to:

                 . . . .

          Increments or adjustments in recognition of
          the member's forthcoming retirement[.]

          [N.J.A.C. 17:2-4.1(a)(10).]



                                  10                            A-0083-11T2
            determination.    Any affected member who
            disagrees with the determination may appeal
            to the PERS Board of Trustees by writing a
            letter setting forth the reasons thereof.
            The appeal should be directed to the
            attention   of    Kathleen   Coates,  Board
            Secretary to the PERS Board of Trustees, at
            the address on the letterhead.

      Despite references in the letter to the right to appeal to

the Public Employee Retirement System (PERS) Board of Trustees,

by   letters    dated   March     25,   2011   and   August    16,   2002,   the

Division acknowledged the PFRS Board of Trustees' jurisdiction

to hear appeals from its administrative determination.                In fact,

in his March 25, 2011 letter, Czyzyk acknowledged that "Harrison

[Town] employees enrolled in the PFRS have filed appeals after

receiving      the   Division's    January     21,   2011     correspondence."

Thus, "[i]n order to provide both the PERS and PFRS Trustees

with a complete record of the matter," Czyzyk requested Harrison

to

            please forward to my attention . . . all
            contracts, agreements, including addendums
            and sidebar agreements currently in-force as
            well as individual agreements and ordinances
            for all individuals or groups of individuals
            affected   by   a  longevity   provision  as
            described in the Division's January 21, 2011
            correspondence.

            (Emphasis added).4

4
   We have highlighted the word "correspondence" to distinguish
it from the Acting Director's subsequent characterization of the
Division's action as a "final administrative determination"
                                                     (continued)


                                        11                             A-0083-11T2
       In accordance with the instructions in Czyzyk's January 21,

2011   letter,   on   April   12,   2011,   FOP    Lodge   116    appealed     the

Division's "administrative determination" to the PFRS Board of

Trustees.    On April 15, 2011, the Secretary to the PFRS Board of

Trustees    informed    the    parties      that   the     appeal    would      be

considered on May 2, 2011.          By letter dated May 5, 2011, the

PFRS Board of Trustees issued a final decision, which approved

the     longevity      schedule      and     rejected       the     Division's

"administrative determination" reflected in Czyzyk's January 21,

2011 letter.     The letter, signed by the PFRS Board of Trustees'

Secretary, Wendy Jamison, stated:

            Based   on   a  review   of   the pertinent
            documents, the PFRS Board voted to approve
            the longevity schedule as cited in Article
            XVIII of the current contract dated January
            1, 2007 to December 31, 2011.

            Consequently, there will be no change in any
            of the retiree's monthly PFRS retirement
            allowances.

       Nearly three months after the PFRS Board of Trustees' final

decision,   Florence     J.   Sheppard,     the    Division's     then     Acting

Director, sent a letter dated July 27, 2011, addressed to the

attorneys representing the affected parties.               After reinstating


(continued)
legally competent to supersede the PFRS Board of Trustees'
conflicting determination, and subject to appellate review by
this court under Rule 2:2-3(a)(2) as a final agency decision.



                                      12                                 A-0083-11T2
the   analysis   reflected     in   Czyzyk's        January    21,   2011   letter,

Sheppard    informed    the    parties       that    "the     Division   will     not

implement the decision of the Board to permit such increases as

creditable for pension retirement credit."                    Sheppard concluded

her letter by informing the recipients, "[y]ou have the right to

appeal this final administrative action to the Superior Court of

New Jersey, Appellate Division, within 45 days of the date of

this letter in accordance with the Rules Governing the Courts of

the State of New Jersey."

      FOP Lodge 116, PBA Local 22, and the Town of Harrison have

appealed to this court, arguing the Acting Director did not have

the legal authority to refuse to implement a final decision of

the PFRS Board.        They seek an order from this court directing

the Division to implement the PFRS Board of Trustees' decision.

                                Firefighters

      Harrison FMBA Local 22 describes itself as "the exclusive

bargaining representative for uniformed employees in the Fire

Department of the Town of Harrison below the rank of Chief."

FMBA Local 22 and Harrison entered into a collective bargaining

agreement effective January 1, 2007 through December 31, 2011.

Article    XX   of   that   agreement    contains      a    longevity    provision

identical to the provision in the contract between Harrison and




                                        13                                  A-0083-11T2
the   bargaining   agents   that   represented   the   police   officers

described supra.

      According to FMBA Local 22, Harrison has had a longevity

program since at least 1976.        In a certification submitted in

this appeal, Harrison Fire Department Battalion Chief and former

FMBA president Michael Greene describes the history of longevity

pay in the FMBA's contracts is as follows:

           From 1976 to 1983, all Town            employees
           received the following longevity:

           After   five years           Two (2%) percent
           After   ten years            Four (4%) percent
           After   fifteen years        Six (6%) percent
           After   twenty years         Eight (8%) percent

                . . . .

           In 1984, the longevity provision of the FMBA
           agreement was as follows:

           After three (3) years        One (1%) percent
           After five (5) years         Three (3%) percent
           After ten (10) years         Five (5%) percent
           After fifteen (15) years     Seven (7%) percent
           After   twenty-two   (22)      years  Nine   (9%)
           percent

                . . . .

           In 1985 . . . :

           After   three (3) years      Two (2%) percent
           After   five (5) years       Four (4%) percent
           After   ten (10) years       Six (6%) percent
           After   fifteen (15) years   Eight (8%) percent




                                   14                           A-0083-11T2
            After twenty-two (22) years                Ten     (10%)
            percent.5

       The longevity schedule increased throughout the years until

about January 1, 1996, when the current formula was adopted.

According to Greene, "[t]his formula for longevity is the same

as the current longevity schedule and has been in at least five

(5) collective negotiations agreements, including the current

one which expires December 31, 2011."               Stated differently, these

longevity     provisions      have           been    considered       creditable

compensation for pension purposes, allowing retired firefighters

to receive pension benefits inclusive of longevity since 1976.

       FMBA Local 22 asserts that the Division has reviewed and

acquiesced to the creditability for pension purposes of these

same   longevity   provisions      on   multiple     prior    occasions.       The

record   before    us   contains    a   letter      dated    August    16,   2002,

written by External Audit Supervisor Czyzyk to the Harrison Town

Clerk.    Czyzyk informed the Clerk in this letter that the audit

section of the Division had determined that several provisions

of the FMBA Local 22 contract applicable from January 1, 1999

through December 31, 2002, including the longevity provision,

were "in violation" of the creditable compensation provision,

N.J.A.C. 17:4-4.1.

5
   The Senior Deputy Attorney General representing the Division
in this appeal did not object to this exhibit.



                                        15                               A-0083-11T2
     The record before us concerning how this 2002 notice of

"violation" from Czyzyk was addressed and resolved by Harrison

and FMBA Local 22 is murky at best.               The paper trail in support

of appellants' position consists of a series of contemporaneous

correspondence from the attorneys representing both FMBA Local

22   and     Harrison    memorializing          telephone     discussions     and

agreements      allegedly    reached     with    a   Division   representative

named   JoAnn    E.   Martin.      The    three      outstanding   issues   were

identified by the attorney representing FMBA Local 22 in his

October 1, 2002 letter to the attorney representing Harrison:

           1.   Fire Sub-Code Official Stipend.     A
           letter from the Town clarifying the actual
           title would resolve the issue.

           2.   Execution of Side Agreement clarifying
           holiday pay in base pay would resolve the
           issue.

           3.   Longevity issue sent to Committee                  on
           Creditable Compensation for review.

           (Emphasis added).

     The   record     does   not   contain       a   direct   indication    that

Harrison reached an agreement with the Division addressing the

longevity issue highlighted in Item 3 above.                    The record is

equally barren of any correspondence or notice of violation from

the Division on the longevity issue during the nine-year period

from 2002 to 2011.       However, whether Harrison and FMBA Local 22

reached an agreement with the Division concerning the violation



                                         16                             A-0083-11T2
referred to by Czyzyk in 2002 is not relevant to the question

before us.       As we made clear in our prefatory remarks, this

appeal   is    limited     to    a    single      legal   question:    whether     the

Director of the Division of Pensions and Benefits has the legal

authority to refuse to implement a final decision reached by the

PFRS Board of Trustees.

    On January 21, 2011, the same date Czyzyk announced his

decision to FOP Lodge 116 regarding the longevity provisions in

the agreement with the police officers, he communicated the same

determination that FMBA Local 22's longevity provision was not

creditable for pension purposes under N.J.A.C. 17:2-4.1.                            On

April 18, 2011, FMBA Local 22 appealed the Division's January

21, 2011 "administrative determination" to the PFRS Board of

Trustees.      On May 2, 2011, the PFRS Board of Trustees rejected

the Division's determination and approved the longevity schedule

cited in the collective bargaining agreement.

    Consistent with the position she took with respect to the

longevity      provision    in       the     collective       bargaining    agreement

involving the police officers, the Acting Director announced the

Division would not implement the decision of the PFRS Board of

Trustees      with   respect     to        the    longevity    provisions    in    the

agreement Harrison entered into with FMBA Local 22.                         In fact,




                                             17                              A-0083-11T2
the Acting Director used nearly identical language in the letter

affecting the firefighters.

        On August 5, 2011, the attorneys representing FMBA Local

22 wrote to the Acting Director to express their disagreement

with her decision to disregard the final determination of the

PFRS Board of Trustees.        The firefighters also disagreed that

her   unprecedented,    unilateral    decision   was    reviewable     as   of

right by this court under Rule 2:2-3(a)(2).            The Acting Director

did not respond to FMBA Local 22's letter.              FMBA Local 22 now

appeals to this court seeking the same relief sought by the Town

of Harrison and the Unions representing the police officers.

                                     II

                             City of Linden

      The   appeals    involving    Linden   relate    to   the   collective

bargaining agreement Linden entered into with FMBA Local 234

effective January 1, 2005.         FMBA Local 234 and Linden also have

a Memorandum of Understanding (MOU) covering the period from

January 1, 2009 through December 31, 2013.             The first provision

at issue in this case involves Article VIII Section D of the

parties' now expired collective bargaining agreement:

            D.   Senior Fire Officer Differential

            Effective January 1, 2000, Fire officers who
            have completed their twentieth (20th) year
            of service with the City of Linden shall
            receive a Senior Fire Officer Differential



                                     18                              A-0083-11T2
             in the amount of $1,500.00 per year to be
             paid in equal bi-weekly installments.

       Article VIII of the agreement, effective January 1, 2009

through     December      31,     2013,6        also     includes     the     following

provision:

             C.     Senior Deputy Chief Differential

             Effective January 1, 2010,                  Senior     Officer
             Pay shall be as follows:

             Beginning of 14th year of service: $1,000.00
             Beginning of 21st year of service: $1,750.00
             Beginning of 24th year of service: $2,250.00
             Said pay shall be non-cumulative and paid in
             equal bi-weekly installments.

       By   letters    dated     January    15,        2010   and   March     18,   2010,

Division auditor Jean C. Monahan began reviewing the collective

bargaining agreement Linden had entered into with FMBA Local

234,    effective      January    1,   2005       through      December     31,     2008.

Monahan     asked     Linden's    Labor     Relations         Specialist,      attorney

Allan C. Roth, whether "compensation associated" with the Senior

Fire Officer Differential reflected in Article VIII, Section C

was    "reported    as   creditable        salary       for   pension     purposes[.]"

Neither Roth nor any other representative of Linden responded to

Monahan's     requests     for     "clarification"            of    the   compensation




6
   This exact language was also included in paragraph 18 of an
MOU entered into before the 2009-2013 agreement was successfully
negotiated.



                                           19                                   A-0083-11T2
awarded to firefighters under this provision of the collective

bargaining agreement.

     On October 19, 2010, Supervisor of External Audits Czyzyk

wrote Roth, in his capacity as Linden's legal representative,

advising him that "[a]fter careful review" of the collective

bargaining agreement and the MOU, the Division had made                                "an

administrative         determination"         that    these    agreements       contained

provisions       "that    may    be     in    violation       of    the    statutes    and

regulations which set forth those forms of compensation that are

creditable      for    pension    purposes.          N.J.A.C.      17:4-4.1(a)(1)      and

(2)."    (Emphasis added).            Czyzyk specifically noted that "[t]he

Division finds that senior officer compensation payable in the

20th,    21st    and     24th    year    of    service       is    extra    compensation

received    in    anticipation          of    retirement      and    in    violation    of

N.J.A.C. 17:4-4.1(a)1 and 2(ix) and (xiii)."7

     As he did in his correspondence with the Town of Harrison,

Czyzyk     concluded       his    letter        to    Roth        with    the   following

statement:

            The   Division  will   not   implement  this
            Administrative determination until 90 days
            have elapsed from the date of this letter to
            permit any members who wish to appeal

7
   The October 19, 2010 letter from Czyzyk contains a
comprehensive review of these two labor agreements.      Czyzyk
raises other questions and concerns in this letter that are not
germane to the issues raised in this appeal.



                                              20                                 A-0083-11T2
            adequate time to do so.    Please provide a
            copy of this letter to all employees and
            retirees   who   are   affected   by   this
            determination.    Any affected member who
            disagrees with the determination may appeal
            to the PFRS Board of Trustees by writing a
            letter setting forth the reasons thereof. .
            . .

            You should not make any adjustments to the
            creditable salary you currently report on
            these members until the end of the 90-day
            appeal period. . . .

            At the end of the 90-day period, if                       no
            outstanding appeals are pending or if                     no
            action was taken by the PFRS Board                        of
            Trustees, the Division will instruct you                  to
            change the creditable salary reported                     to
            conform to this determination. . . .

            (Emphasis added).

      Linden sought to appeal the Division's October 19, 2010

determination in a letter addressed to Czyzyk dated January 17,

2011.       Linden        also   included        in   this    letter-appeal      the

"additional information" Czyzyk had requested nearly two months

earlier.     In his capacity as Linden's Labor Relations Specialist

counsel, Roth claimed that the Senior Deputy Chief Differential

was     negotiated   after       the    agreement     had    been    submitted    to

arbitration.       According to Roth, the arbitrator "awarded senior

officer     pay,     in     lieu       of    increasing      or     re-establishing

longevity."    Thus, under the collective bargaining agreements:

            [N]o employee hired after December 31, 1974
            was entitled to receive longevity. However,
            with the arbitrator's award of compensation



                                            21                             A-0083-11T2
            entitled "senior officer pay" all uniformed
            fire department employees are entitled to
            [this] pay, which was and is now paid as
            part of salary through the City's bi-weekly
            pay system.    Therefore, the City and the
            FMBAs believe the pay to be pensionable and
            in compliance with N.J.A.C. 4A:17-4:4.1(iv).

On March 18, 2011, FMBA Local 234 submitted a letter in support

of Linden's position.

    On May 2, 2011, the PFRS Board of Trustees reversed the

Division's      administrative       determination          and   found    the    senior

officer    pay       differentials    to    be     creditable     compensation         for

pension purposes.           Once again, the Division's Acting Director

refused to implement the PFRS Board of Trustees' final decision.

In her letter dated July 27, 2011, the Acting Director again

found     the        "individual     salary        adjustments"     were      "granted

primarily       in    anticipation     of        the   member's    retirement,"          in

violation of N.J.S.A. 43:16A-1(26)(a).

    As was the case with respect to the Town of Harrison, FMBA

Local     234    objected      to     the        Acting     Director's      unilateral

determination.         The Acting Director did not respond.                FMBA Local

234 filed this appeal thereafter.

                                           III

                                   Vernon Township

    Vernon       Township     entered       into       a   collective     negotiations

agreement (CNA) with PBA Local 285 effective January 1, 2008




                                            22                                   A-0083-11T2
through December 31, 2011.       The disputed provisions at issue in

this appeal are found in Article XVII of that agreement, which

provides as follows:

           A.   The salaries from Employees covered by
           this AGREEMENT shall be as set forth on
           Schedule A annexed.

           B.   The differential between ranks shall be
           ten (10%) percent above the prior grade.

                 . . . .

           E. An Officer having twenty (20) years of
           service within the meaning of the Police and
           Fire Retirement System or having fifteen
           (15) years of service with Vernon Township
           and ten (10) years of Law Enforcement
           experience shall be elevated one-half (1/2)
           the distance in pay to the next higher rank,
           and this will be added to and become part of
           the Officer's base salary.

      On   May   20,   2010,   Czyzyk      wrote    a   letter    to   Vernon's

Personnel Director, Pennie Roland, advising her that

           [a]fter careful review of the PBA Local #285
           Contract for the period January 1, 2008
           through December 31, 2011 . . . the Division
           has made an administrative determination
           that the . . . contract contains a provision
           that is causing monies to be included in the
           base salary reported to the Division that is
           not creditable for pension purposes.

      After   specifically     identifying       "Article   XVII:      Salaries:

Paragraph E" as the problematic provision, Czyzyk explained that

the   Division   "considers    this   to    be     compensation   given    to    a

member in anticipation of retirement."                  Czyzyk concluded his




                                      23                                A-0083-11T2
letter     to   Vernon's    Personnel         Director       Roland    with    the    same

admonition he included in his communications with the Town of

Harrison and the City of Linden.                    (See supra, Part I, at 9-11;

and Part II, at 20-21).                 In the interest of clarity, Czyzyk

concluded his letter by emphasizing the following three points:

(1) the Division would not implement this action for ninety days

to permit employees adequate time to appeal to the PFRS Board of

Trustees; (2) the Township should not make any adjustment to the

creditable salary until the end of the appeal period; and (3)

the Division would instruct the Township how to implement its

determination only "if no outstanding appeals [were] pending or

if    no   action    was    taken       by    the     PFRS    Board    of     Trustees."

(Emphasis added).

      Following      the    Division's            instructions,       PBA     Local    285

appealed the May 20, 2010 "administrative determination" to the

PFRS Board of Trustees on August 11, 2010.                          After an initial

postponement to consider additional information submitted by PBA

Local 285 concerning the financial impact of the terms of the

contract, the PFRS Board of Trustees met on January 10, 2011,

and   formally      determined      the      salary    increases       provided       under

Article     XVII,    Paragraph      E    of    the    CNA    were     compensable      for

pension purposes.          The PFRS Board of Trustees communicated its

decision in a letter dated January 12, 2011, from Wendy Jamison,




                                             24                                 A-0083-11T2
Secretary      to   the     PFRS    Board   of    Trustees,   to    the    attorneys

representing PBA Local 285.

       After    framing     the    legal    question    presented    to    the     PFRS

Board of Trustees by PBA Local 285 on behalf of the members

affected by the Division's initial administrative determination,

Secretary Jamison wrote:

             The Board voted to approve your request to
             include Paragraph E above as creditable
             compensation in the PFRS.       The Board
             considered the salary as an additional pay
             step of the salary scale as denoted on
             schedule A. A copy of this letter is being
             sent to the Internal and External Audit
             Sections of the Division to implement the
             Board's decision.8

       More than seven months after the PFRS Board of Trustees'

decision, Acting Director Florence Sheppard sent a letter dated

July   27,     2011,   to    the    attorneys     representing     PBA    Local      285

advising them that "the Division will not implement the decision

of the Board to permit such increases as creditable for pension

retirement      credit."           The   letter    reflects   that       the    Acting

Director reached this decision after conducting a de novo review

of the evidence presented to the PFRS Board of Trustees and

engaging in her own independent legal analysis of the relevant

statutory and regulatory provisions.                   The Acting Director did

8
   PBA Local 285 included in its Appendix a copy of Secretary
Jamison's January 12, 2011 letter, which lists Czyzyk as
receiving a copy of this correspondence.



                                            25                                 A-0083-11T2
not cite any legal authority to support her decision to refuse

to implement the decision of the PFRS Board of Trustees.

    Consistent        with    the      approach     she   employed         in   the   cases

involving      the   Town    of    Harrison       and   the    City   of    Linden,     the

Acting Director concluded her letter by informing PBA Local 285

that: "You have the right, if you wish, to appeal this final

administrative       action       to   the   Superior         Court   of    New   Jersey,

Appellate Division . . . in accordance with the Rules Governing

the Courts of the State of New Jersey."

    By letter dated August 8, 2011, the attorneys representing

PBA Local 285 asserted that "[t]he Director of the Division of

Pensions and Benefits does not have the authority to determine

what is and is not creditable salary and to ignore decisions of

the PFRS Board."          Citing N.J.S.A. 43:16A-1.2 and N.J.A.C. 17:1-

1.1(g), PBA Local 285 argued the Director's role was limited to

reviewing the positions covered by the retirement system and

recommending to the PFRS Board of Trustees whether they should

remain     a    covered     position      for      pension      purposes.         Counsel

concluded his letter to the Acting Director with the following

request:

               We also respectfully request that, while
               this   dispute  is   pending,   you    suspend
               implementation  of   your   July    27,   2011
               determination  for    any   PBA   Local    285
               collective negotiations unit member who is
               receiving a pension benefit base[d] on the



                                             26                                   A-0083-11T2
            inclusion   of   the  disputed  contractual
            clause. To reduce their pension benefits at
            this time, especially in light of recent
            legislation that will all but eliminate any
            pension COLA [Cost of Living Adjustment],
            will [wreak] havoc on the household budgets
            of these retirees who relied in good faith
            on the Division's calculation of their
            pension benefit.

            Thank [you] for your attention to this
            matter. We look forward to your response.

    The Acting Director did not respond to this letter.              PBA

Local 285 filed its Notice of Appeal with this court on August

31, 2011.

                                   IV

                            Borough of Ramsey

    The     Borough    of    Ramsey     entered   into   a   collective

negotiations agreement (CNA) with PBA Local 155 covering the

period of time from January 1, 2007 through December 31, 2011.

The CNA included a provision entitled "Salary Schedule" that

provided as follows:

            Senior Officer Pay status is a new category.
            After completing 23 years of service as a
            police officer, top step patrolmen will be
            placed in senior officer pay status. Annual
            salary for those in senior officer pay
            status will be salary that is midway between
            the salary for an 8th step patrolman and a
            sergeant.

    The appellate record includes a Ramsey Police Department

Proposed Salary Schedule from 2003 through 2006.         Based on this




                                   27                          A-0083-11T2
salary schedule,       "midway between the salary for an 8th step

patrolman and a sergeant" in 2002 would constitute an annual

salary differential of approximately $3851.9                 The Senior Officer

Pay    differential    in   2006   was    approximately       $4419.10     Senior

Officer Pay status was a new category, available only to those

police officers who had completed twenty-three years of service;

a    top   step   patrol-officer   was        placed   in   senior   officer   pay

status only after reaching this career milestone.

       The case involving PBA Local 155 and Ramsey followed the

same procedural pattern we have discussed at length in this

opinion in Part I involving Harrison, Part II involving Linden,

and Part III involving Vernon.                 By letter dated October 15,

2004, Czyzyk advised Ramsey Borough Administrator Nicholas C.

Sanos that the Division viewed the "Senior Officer Pay" status

"as a salary adjustment granted primarily in anticipation of the

member's retirement."        As such, these salary increases were not


9
   This Salary Schedule shows that in 2002, an annual salary for
an 8th step patrol-officer was $81,500.87.    A sergeant in the
same level of seniority shows an annual salary in 2002 of
$89,203.47. The "midway" salary differential between these two
figures is approximately $3851.
10
    The differential would increase commensurate with the annual
salary increases. Based on this Salary Schedule, in 2006 an 8th
step patrol-officer's annual salary was $93,525; a sergeant's
annual salary with the same level of seniority was $102,364.
The "midway" salary differential between these two figures is
approximately $4419.



                                         28                              A-0083-11T2
creditable     for    pension    purposes      under    N.J.S.A.    43:16A-1    and

N.J.A.C. 17:4-4.1.

       As he did with respect to the other three municipalities,

Czyzyk    informed     Borough    Administrator          Sanos    that:   (1)   the

Division would not implement this action for ninety days to

permit employees adequate time to appeal to the PFRS Board of

Trustees;    (2)     Ramsey   should     not    make   any   adjustment    to   the

creditable salary until the end of the appeal period; and (3)

the    Division      would    instruct    Ramsey       how   to    implement    its

determination only if no outstanding appeals were pending or if

the PFRS Board of Trustees had not decided otherwise.

       PBA Local 155 appealed the Division's administrative action

to the PFRS Board of Trustees.                By letter dated July 12, 2011,

PFRS   Board   of     Trustees   Secretary       Wendy    Jamison    advised    the

attorneys representing PBA Local 155 that the Board had ruled in

their client's favor:

            Based   on   a  review   of  the   pertinent
            documents, the PFRS Board voted to approve
            the salary schedule as cited in the PBA
            Local No. 155 contract, Article III and
            Appendix I dated January 1, 2007 to December
            31, 2011.   The Board found the pay was an
            additional salary step as denoted in the
            salary guideline.

            Consequently, there will be no change in any
            of the retiree's monthly PRFS retirement
            allowances.




                                         29                               A-0083-11T2
     The PFRS Board of Trustees' decision in the appeal filed by

PBA Local 155 triggered a considerably faster,11 albeit familiar

reaction from Acting Director Sheppard.            In a letter dated July

27, 2011, Sheppard engaged in the same de novo review of the

record presented to the PFRS Board of Trustees and reached the

opposite legal conclusion.             In the Acting Director's opinion

"all of the senior officer pay violates the provisions of the

statute   and   regulation     since    the   payments   are   clearly   being

awarded   in    order   to   enhance    the   member's   retirement   benefit

'upon attainment of a specified number of years of service.'"

Once again, Sheppard concluded her letter by apprising those

affected by her decision that they had the right "to appeal this

final administrative action" to this court.

     By letter dated August 5, 2011, the attorney representing

PBA Local 155 asked Sheppard the following question:

           Please advise me on what authority your
           determination not to enforce the Board's
           decisions    is  considered  the  "final
           administrative action" in light of the


11
  Sheppard waited three months to communicate her unwillingness
to implement the PFRS Board of Trustees' decision in the case
involving police officers and firefighters from the Town of
Harrison; she took nearly two months to apprise the affected
police officers in the City of Linden, and more than seven
months to inform the affected police officers of the Township of
Vernon. By contrast, in the case involving police officers from
the Borough of Ramsey, Sheppard sent her refusal letter just two
weeks after the PFRS Board of Trustees' decision.



                                       30                             A-0083-11T2
               existing Board of Trustees' decisions which
               have not been appealed to my knowledge.

Sheppard did not respond.                On September 6, 2011, PBA Local 155

filed    a    Notice     of   Appeal     to    this     court       seeking      a   judicial

declaration that the Director of the Division of Pensions and

Benefits       does    not    have     the     legal      authority         to   refuse      to

implement a final decision of the PFRS Board of Trustees merely

because       the     Director    disagrees        with       the    Board's         decision.

Consequently, Sheppard's decision refusing to implement the PFRS

Board of Trustees' decision is ultra vires, without legal force

or effect.

                                              V

                                Township of Woodbridge

       Woodbridge entered into a collective bargaining agreement

with    PBA    Local     38   covering       the   period      from    January        1,   2009

through       December    31,    2011.        Article     V    of    this    agreement       is

denoted "Salaries."              Paragraph B in Article V provides for a

"Senior Officer Differential."                This provision states:

               B.   Senior Officer Differential - Employees
               having completed twenty-two (22) years of
               service shall be entitled to a senior
               officer differential benefit.    The benefit
               shall be an increase in the base pay rate by
               five and one-half percent (5.5%) and is
               reflected in the senior officers' base rate
               (1st Class)[.]

Article VII is denoted "Longevity," and provides as follows:




                                              31                                      A-0083-11T2
         A.   The Township agrees to pay as a fringe
         benefit the following longevity payments:

         2.5% after the start of 6th and through
         completion of 10th year or [sic] service;

         4%   after   start  of   11th   and   through
         completion of 14th year of service;

         5.5% after start of 15th and          through
         completion of 20th year of service;

         7% at start of 21st year through completion
         of 22nd year of service;

         9.5% at start of 23rd year of service and
         each year thereafter.

    By letter dated January 20, 2011, Czyzyk advised Woodbridge

Township Chief Financial Officer (CFO) Richard Cahill that,

         the Division has made an administrative
         determination that the agreement executed
         between the Township and the Woodbridge
         Policemen's Benevolent Association, Local
         No. 38 contains provisions that may be
         causing monies to be included in the base
         salary reported to the Division that are not
         creditable for pension purposes as per
         N.J.A.C. 17:4-4.1(a)(1) and (2).

    After quoting from the regulatory standard, Czyzyk cited

Article V, Paragraph B "Salaries-Senior Officer Differential"

from the agreement and stated, "[t]he Division finds that senior

officer compensation payable in the 22nd year of service is

extra compensation received in anticipation of retirement and in

violation of N.J.A.C. 17:4-4.1(a)(1) and (2)(ix) and (xiii)."




                               32                        A-0083-11T2
With respect to Article VII, Paragraph A "Longevity," Czyzyk

indicated that:

            The   Division  finds   that  the   longevity
            increment from 7% to 9.5% in the 23rd year
            of service incrementally excessive compared
            to prior increases. Also, granting such an
            increase in the 23rd year of an Officer's
            service is clearly being awarded in order to
            enhance that member's retirement benefit.

    As he did when he sent similar letters to the other four

municipalities      involved      in    this       appeal,   Czyzyk      concluded     by

informing Woodbridge CEO Cahill that: (1) the Division would not

implement    this    action    for      ninety       days    to    permit     employees

adequate    time    to   appeal    to    the       PFRS   Board    of    Trustees;    (2)

Woodbridge    should     not   make     any       adjustment      to    the   creditable

salary until the end of the appeal period; and (3) the Division

would   instruct     Woodbridge        how    to    implement     its    determination

only if no outstanding appeals were pending or if the PFRS Board

of Trustees had not decided otherwise.

    PBA Local 38 followed Czyzyk's instructions and appealed

the Division's January 20, 2011 administrative determination to

the PFRS Board of Trustees.              By letter dated May 5, 2011, PFRS

Board Secretary Jamison informed the attorneys representing PBA

Local 38 that:

            Based   on  a   review  of   the  pertinent
            documents, the PFRS Board voted to approve
            the senior officer differential as cited in
            Article V and the longevity schedule as



                                             33                                 A-0083-11T2
            cited in Article VII             of    the    [collective
            bargaining] contract.

            Consequently, there will be no change in any
            of the retiree's monthly PFRS retirement
            allowances.12

     By   letter    dated     July    27,    2011,13     Sheppard     informed   the

attorneys representing PBA Local 38 that "the Division will not

implement the decision of the Board to permit such increases as

creditable   for    pension    retirement         credit."      Once    again,   the

Acting Director reached this conclusion after engaging in a de

novo review of the evidence presented by PBA Local 38 to the

PFRS Board of Trustees.         Finally, as she had done in the cases

involving    the   other    four     municipalities       in   this    appeal,   the

Acting Director advised PBA Local 38 that it had "45 days [from]

the date of this letter" to appeal her "final administrative

action" to this court "in accordance with the Rules Governing

the Courts of the State of New Jersey."

     By the time the Acting Director made this decision, the law

firm representing PBA Local 38 also represented the Town of

Harrison and PBA Local 22, and the Borough of Ramsey and PBA


12
   As she had done in her prior correspondence, Jamison copied
Czyzyk in this letter.
13
   The Acting Director's letter was dated nearly three months
after the PFRS Board of Trustees communicated its final decision
to PBA Local 38 and to the Division's Supervisor of External
Audits.



                                        34                                 A-0083-11T2
Local 155.       By letter dated August 5, 2011, the attorney for PBA

Local 38 asked Sheppard the same question he had asked on behalf

of PBA Local 155:

               Please advise me on what authority your
               determination not to enforce the Board's
               decisions    is   considered    the    "final
               administrative action" in light of the
               existing Board of Trustees' decisions which
               have not been appealed to my knowledge.

      Once again, the Acting Director did not respond.                      PBA Local

38 filed its appeal to this court on September 6, 2011, seeking

a   judicial     declaration        that    the    Acting     Director's    action      in

refusing to implement a final decision of the PFRS Board of

Trustees is ultra vires, without legal force or effect.

                                            VI

                                    Legal Analysis

      All appellants argue the Acting Director did not have the

authority to act unilaterally and refuse to implement a final

decision       reached   by   the    PFRS    Board     of    Trustees.      We    agree.

Under     the    statutory     and     regulatory           scheme   established        to

administer this pension system, the PFRS Board of Trustees is

the     only    administrative        body        authorized    to   make    a      final

administrative determination regarding what can be considered

"creditable compensation" for pension benefits under N.J.S.A.

43:16A-1(26)(a) and N.J.A.C. 17:4-4.1.




                                            35                                   A-0083-11T2
      The    PFRS    is   "a    statewide      pension   system   for     full-time

policemen and firemen designed to ensure the uniform protection

of   all    such    public     officers   through    the    medium   of    pensions

payable from [the] fund."            Saccone v. Bd. of Trs. of Police &

Firemen's Ret. Sys., 219 N.J. 369, 378-79 (2014) (quoting Seire

v. Police & Fire Pension Comm'n of Orange, 6 N.J. 586, 591

(1951)).     In 1955, the Legislature "transferred" the PFRS Board

of Trustees to the Division of Pensions and Benefits in the

Department of the Treasury.14             N.J.S.A. 52:18A-96.        However, the

Legislature also made clear that these public pension boards

retained     "all    of   their   respective      present   functions,      powers,

duties, equipment and records[.]"               Ibid. (emphasis added).

      The Legislature vested the PFRS Board of Trustees with "the

general      responsibility        for    the     proper    operation      of    the

retirement system."            N.J.S.A. 43:16A-13(a)(1).          The PFRS Board

consists of eleven trustees who are selected in the following

fashion:

             (a) Five members to be appointed by the
             Governor, with the advice and consent of the

14
   The Legislature also transferred to the Division of Pensions
in the Treasury Department the "Board of Trustees of the Public
Employees' Retirement System, the Prison Officers' Pension
Commission, the Board of Trustees of the Teachers' Pension and
Annuity Fund, the Board of Trustees of the Alcoholic Beverage
Law Enforcement Officers' Pension Fund . . . and the
Consolidated Police and Firemen's Pension Fund Commission[.]"
Ibid.



                                          36                               A-0083-11T2
          Senate, who shall serve for a term of office
          of four years and until their successors are
          appointed and who shall be private citizens
          of the State of New Jersey who are neither
          an officer thereof nor an active or retired
          member of any police or fire department
          thereof. Of the four members initially
          appointed by the Governor . . . one shall be
          appointed for a term of one year, one for a
          term of two years, one for a term of three
          years, and one for a term of four years.

          (b) The State Treasurer or the deputy State
          Treasurer, when designated for that purpose
          by the State Treasurer.

          (c) Two policemen and two firemen who shall
          be active members of the system and who
          shall be elected by the active members of
          the system . . . .

          (d) One retiree from the system who shall be
          elected by retirees from the system . . . .

          [N.J.S.A. 43:16A-13(a)(2)(a)-(d).]

    The five "public" unaffiliated trustees who are appointed

by the Governor, with the advice and consent of the Senate,

serve for a term of "four years and until their successors are

appointed[.]"    N.J.S.A. 43:16A-13(a)(2)(a).         The State Treasurer

or deputy State Treasurer serves on a permanent basis, without a

fixed term.     N.J.S.A. 43:16A-13(a)(2)(b).        The two active police

officers and two active firefighters are "elected by the active

members of the system" and serve "for a term of four years

according to such rules and regulations as the board of trustees

shall   adopt    to   govern   such    election."      N.J.S.A.   43:16A-




                                      37                          A-0083-11T2
13(a)(2)(c).        The final member must be a "retiree" from the

pension system, who can be either a former police officer or

firefighter.        This trustee serves "for a term of four years

according to such rules and regulations as the board of trustees

shall     adopt    to     govern       the     election."           N.J.S.A.        43:16A-

13(a)(2)(d).

    All     trustees      of     the   PFRS       Board    must    "take      an   oath    of

office" affirming to fulfill his or her duties as a board member

"diligently       and   honestly."           N.J.S.A.      43:16A-13(a)(3).            Each

trustee    also    affirms       under       oath   that    he     or   she    "will      not

knowingly violate or willingly permit to be violated any of the

provisions    of    the    law    applicable        to    the     retirement       system."

Ibid.     This oath of office must be "subscribed by the member

making it, and certified by the officer before whom it is taken,

and immediately filed in the office of the Secretary of State."

Ibid.

    The members of the PFRS Board of Trustees serve without

compensation, entitled only to be "reimbursed for all necessary

expenses that they may incur through service on the board."

N.J.S.A. 43:16A-13(a)(5).              Each trustee has an equal vote on the

board, regardless of how he or she was selected to serve, and

six duly appointed trustees "must be present at any meeting" in




                                             38                                    A-0083-11T2
order for the Board to be able to transact business.                          N.J.S.A.

43:16A-13(a)(6).

      Subject       to     the     limitations       of    Police    and     Firemen's

Retirement System Act, N.J.S.A. 43:16A-1 to -68, the PFRS Board

of Trustees is obligated, on an annual basis,                            "to establish

rules    and      regulations         for   the   administration      of    the   funds

created by this act and for the transaction of the board's and

committees'        business."           N.J.S.A.     43:16A-13(a)(7).          Because

decisions made by the PFRS Board of Trustees may affect other

public     pension       systems      administered    by    other    public    pension

boards,15 these "rules and regulations shall be consistent with

those adopted by the other pension funds within the Division of

Pensions and Benefits in order to permit the most economical and

uniform administration of all such retirement systems."                        Ibid.

      The Legislature also described the function it expected the

Director     to    perform       in    assisting    the    Board    of     Trustees    in

carrying out the responsibilities of its office.                         "The Director

of   the    Division       of    Pensions     and    Benefits      shall    appoint     a

qualified employee of the division to be secretary of the board.

The administration of the program shall be performed by the

personnel of the Division of Pensions and Benefits."                          N.J.S.A.

43:16A-13(a)(8) (emphasis added).

15
     See N.J.S.A. 52:18A-96.



                                             39                                A-0083-11T2
    The role and function of the Director of the Division of

Pensions and Benefits is equally defined under the prevailing

statutory and regulatory system:

         The   Division   of    Pensions   established
         hereunder shall be headed, directed and
         supervised by a director, who shall be a
         person qualified by training and experience
         to direct the work of such division.      The
         director of such division shall be appointed
         by the Governor, with the advice and consent
         of the Senate, and shall serve during the
         term of the Governor appointing him, and
         until the director's successor is appointed
         and has qualified. The Director of the
         Division of Pensions shall receive such
         salary as shall be provided by law.

         [N.J.S.A. 52:18A-99.]

The role of the Division to assist the PFRS Board of Trustees is

clearly delineated in the regulations adopted to administer this

public pension:

         With respect to all claims for benefits, the
         Division of Pensions and Benefits shall
         investigate    increases     in    compensation
         reported for credit which exceed reasonably
         anticipated annual compensation increases
         for members of the retirement system based
         upon consideration of the Consumer Price
         Index for the time period of the increases,
         the   table  of    assumed   salary   increases
         recommended by the actuary and adopted by
         the   Board,   and    the   annual   percentage
         increases of salaries as indicated in data
         from    the  Public     Employment    Relations
         Commission,   or    through    other   reliable
         industry sources of information regarding
         average annual salary increases. Those cases
         where a violation of the statute or rules is
         suspected shall be referred to the Board.



                                 40                        A-0083-11T2
            [N.J.A.C. 17:4-4.1(d) (emphasis added).]

The Division has the same obligation generally to "investigate

increases    in   compensation   reported   for   credit,   which    exceed

reasonably anticipated annual compensation increases for members

of the retirement system," N.J.A.C. 17:1-7.3(a), and report to

the "respective Board or Commission" cases "where a violation of

the statute is suspected."       N.J.A.C. 17:1-7.3(b).

    This     regulatory   scheme    is   reflected     in   every    letter

authored and sent to every appellant by            Michael Czyzyk, the

Division's Supervisor of External Audits.            As Czyzyk dutifully

explained:

            The   Division  will   not   implement  this
            Administrative determination until 90 days
            have elapsed from the date of this letter to
            permit any members who wish to appeal
            adequate time to do so.     Please provide a
            copy of this letter to all employees and
            retirees    who  are    affected   by   this
            determination.    Any affected member who
            disagrees with the determination may appeal
            to the PFRS Board of Trustees by writing a
            letter setting forth the reasons thereof. .
            . .

            You should not make any adjustments to the
            creditable salary you currently report on
            these members until the end of the 90-day
            appeal period. . . .

            At the end of the 90-day appeal period,          if
            no outstanding appeals are pending or if         no
            action was taken by the PFRS Board               of
            Trustees, the Division will instruct you         to




                                    41                              A-0083-11T2
              change the creditable salary                reported       to
              conform to this determination.

      The PFRS Board of Trustees has the authority to "question

the   compensation     of    any      member    or    retiree    to     determine     its

credibility where there is evidence that compensation reported

as base salary may include extra compensation."                        N.J.A.C. 17:4-

4.1(b).       The PFRS Board of Trustees is empowered to conduct

investigations of "increases in compensation reported for credit

which       exceed   reasonably         anticipated           annual     compensation

increases      for   members     of     the    retirement       system."        In     re

Snellbaker, 414 N.J. Super. 26, 34 (App. Div. 2010) (citation

omitted).

      If    resolution      of   a    question       before    the     PFRS   Board   of

Trustees "involves a question of facts," the Board has the legal

authority to refer the matter to the Office of Administrative

Law   for    an   evidentiary        hearing    before    an    Administrative        Law

Judge.      N.J.A.C. 17:4-1.7(d).              If the appeal before the PFRS

Board of Trustees concerns only a legal determination, as is the

case in most of the appeals we decide here, "the Board may

retain the matter and issue a final administrative determination

which shall include detailed findings of fact and conclusions of

law based upon the documents, submissions and legal arguments of

the parties."        N.J.A.C. 17:4-1.7(e).               Once the PFRS Board of

Trustees reaches a final determination, the affected PFRS member



                                          42                                   A-0083-11T2
has   the   right    to   appeal   to    the     Superior       Court,    Appellate

Division.    Ibid.

      The Acting Director has not cited any authority to support

taking the unprecedented action of conducting a de novo review

of the PFRS Board of Trustees' final determinations of the cases

we review here, and thereafter refusing to implement the Board's

final   determination.       Our   own       independent    research       has   also

failed to find any authority to support the Acting Director's

action.16




16
   Indeed, the Division of Pensions and Benefits' own website
states: The "general responsibility for the operation of the
PFRS is vested in the Board of Trustees under the provisions of
N.J.S.A. 43:16A-13." For those interested in submitting an
application to be considered for appointment to the PFRS Board
of Trustees, the Division provides the following description of
the responsibilities of the PFRS Board:

            Render determinations            regarding     Disability
            retirement cases.

            Review    appeals    pertaining                to       the
            disallowance of pension benefits.

            Adopt rules and regulations to provide for
            the payment of benefits and collection of
            monies as required by the statute.

            Establish rules and regulations within the
            limitations of statutes and opinions of the
            Courts and the Attorney General, designed to
            prevent injustices and inequities that may
            arise in the operation of the Retirement
            System.

                                                                         (continued)


                                        43                                  A-0083-11T2
      The    Attorney    General    has    responded       in    these   appeals    on

behalf of the Acting Director.                 In that capacity, the Attorney

General has questioned whether this court has the authority to

compel the Division to abide by the PFRS Board of Trustees'

final decision in these cases.             The Attorney General argues that

mandamus relief "is only appropriate where the party seeks to

compel   a    governmental       agency    to    perform    a    'duty   [that]    is

ministerial     and     wholly   free     from    doubt'    or    'to    compel    the

exercise of discretion, but not in a specific manner.'"                     Twp. of

Neptune v. State, Dep't of Envtl. Prot., 425 N.J. Super. 422,

434   (App.    Div.      2012)    (citing        Loigman    v.    Twp.    Comm.     of

Middletown, 297 N.J. Super. 287, 299 (App. Div. 1997)).




(continued)
          Resolve individual questions on the merits
          of each case in terms of statutes, opinions
          of the Attorney General, advice of the
          Actuary and cases cited by counsel as
          deliberated by the Courts.

             View monthly and annual               reports setting
             forth data such as assets             and liabilities,
             income and disbursements              and statistical
             summarization of membership           as documented by
             the Actuary.

             [Division   of    Pensions   and    Benefits,
             http://www.state.nj.us/treasury/pensions/boa
             rd_results.shtml#pfrs (last visited Mar. 8,
             2015).]



                                          44                                A-0083-11T2
      Following      this    line       of    reasoning,        the   Attorney   General

attempts to justify the unprecedented action taken by the Acting

Director in these cases by advancing the following argument:

           While N.J.A.C. 17:4-4.1(d) and N.J.A.C.
           17:1-7.3 direct the Division to report any
           suspected violations to the Board, nothing
           in the legislative and regulatory scheme
           compels the Division to accept "claims for
           benefits" that clearly offend the statute.
           Indeed, "administrative agencies are . . .
           charged under the State constitution with
           the responsibility of faithfully executing
           the laws." In re Appeal of Certain Sections
           of the Uniform Admin. Procedure Rules, 90
           N.J. 85, 92-93 (1982) (citing N.J. Const.
           art. V, § 1, ¶ 11).

      The Attorney General's position on behalf of the Acting

Director disregards that the Legislature unambiguously "vested"

the PFRS Board of Trustees with "the general responsibility for

the   proper   operation         of   the     retirement        system[.]"       N.J.S.A.

43:16A-13(a)(1).            As   discussed           in    great   detail    infra,    the

composition     of     the       PFRS        Board        of   Trustees     reveals    the

Legislature's intent to devise an administrative quasi-judicial

body composed predominantly of private citizens.                            The men and

women who serve as trustees on the PFRS Board are required to

take an oath that they will discharge their responsibilities and

exercise their legal authority "diligently and honestly," and

"will not knowingly violate or willingly permit to be violated

any of the provisions of the law applicable to the retirement




                                              45                                 A-0083-11T2
system."        N.J.S.A. 43:16A-13(a)(3).                      In the regulatory system

devised to implement this legislative mandate, the PFRS Board of

Trustees       has        the        exclusive         authority          to        "question        the

compensation         of     any       member       or    retiree          to        determine        its

credibility where there is evidence that compensation reported

as base salary may include extra compensation."                                     N.J.A.C. 17:4-

4.1(b).

       The     Acting      Director's            refusal       to    implement            the      final

decision of the PFRS Board of Trustees is untethered to any

statutory or regulatory authority.                         This unprecedented ad hoc

approach       adopted          by    the    Acting        Director            in     these        cases

undermines the complimentary role the Division is obligated to

play by providing the staffing support necessary to enable the

PFRS    Board    of     Trustees        to   carry       out    its       role       as   the      final

administrative            arbiter           of     what         constitutes               creditable

compensation for purposes of pension benefits.                                      N.J.A.C. 17:4-

4.1(d); N.J.A.C. 17:1-7.3(b).

       The PFRS Board of Trustees has acted as the final arbiter

in     these    matters         consistently            since       its    creation           by     the

Legislature.         "[T]he fact that the Legislature has not acted in

response to an agency's interpretation or practice is 'granted

great weight as evidence of its conformity with the legislative

intent.'"       Klumb v. Bd. of Educ. of Manalapan-Englishtown Reg'l




                                                  46                                          A-0083-11T2
High   Sch.     Dist.,    Monmouth          Cnty.,   199   N.J.    14,   24-25     (2009)

(quoting Malone v. Fender, 80 N.J. 129, 137 (1979)).

       We also question the role the Attorney General has played

in    these    appeals.         In    our    view,   the   position      the   Attorney

General adopted in Gladden v. Board of Trustees of the PERS, 171

N.J. Super. 363 (App. Div. 1979), should have been followed in

these cases.       In Gladden, a World War II veteran who had served

for many years in our State's Legislature applied for enrollment

in the Public Employees' Retirement System in May 1977.                           Id. at

366-67.       The Attorney General advised the PERS Board "that under

the governing statutes[,]" based on the appellant's "continuous

permanent employment in the Legislature" and his status as a

veteran, the PERS Board was "mandatorily required" to enroll the

appellant in the PERS, retroactive to 1958.                   Id. at 367.

       The     PERS     Board        steadfastly      disregarded        the   Attorney

General's legal opinion and refused to enroll the appellant into

the    PERS    based     on     its     interpretation      of     one    of   its     own

regulations.          Ibid.     The PERS Board notified the appellant of

its decision, "indicating that the decision was final and could

be appealed to the Appellate Division."                    Ibid.     Thereafter, the

Attorney General requested the PERS Board "to reconsider its

decision."       Unfortunately, the PERS Board remained defiant and




                                              47                                 A-0083-11T2
"denied the Attorney General's request for a reconsideration."

Ibid.

    The appellant in Gladden appealed to this court.                      The PERS

Board   asked    the    Attorney   General    to   represent       its   interests

before this court.       In response,

           the Attorney General reiterated to the Board
           that the issue involved was purely one of
           construction of the governing statutes; that
           the Attorney General's opinion on the legal
           issue was patently correct and binding on
           the Board, and that there was no arguable
           basis upon which the Board's decision could
           be defended in court.       Accordingly, the
           Board was advised that the Attorney General
           would    not    provide   it    with    legal
           representation in the courts at public
           expense and that a motion to intervene in
           support of the Attorney General's opinion
           would be filed.

           [Ibid.]

    The    PERS    Board   in     Gladden    retained    private     counsel    and

filed an appeal from the Attorney General's "decision not to

afford representation to the [PERS] Board."                  Id. at 368.        The

Attorney General moved to intervene on his own behalf as an

appellant.      Ibid.    Ultimately, we granted the Attorney General's

motion for leave to participate as amicus curiae, "permitted the

individual members of the [PERS] Board to intervene on their own

behalf,"   and    denied    the    motions    filed     by   the   PERS    Board's

privately retained law firm to designate it as "special counsel"

to the PERS Board and order the State to pay its legal fees in



                                       48                                 A-0083-11T2
connection with the appeal.            Ibid.     The Supreme Court denied the

PERS Board's privately retained motions for leave to appeal our

decisions.        Ibid.

    After         deciding    this    flurry    of   motions,    we    reached   the

following decision:

             There can be no question that a refusal of a
             state agency to abide by a valid state law
             is a fundamental concern of the Attorney
             General    both    in    his    capacity     and
             responsibility as adviser to the agency and
             in   his   capacity   and   responsibility    as
             protector of the public. Since the efforts
             of   the   Attorney   General   informally    to
             convince the Board to abide by the statutory
             scheme   and   grant   appellant's     mandatory
             enrollment    have    met    with    not    only
             unacceptance but defiance, the Attorney
             General   has   appeared   "to    preserve   his
             function and responsibility and to protect
             the   public   from   arbitrary    and   illegal
             action."

             [Id. at 368-69 (emphasis added).]

    Here, by contrast, the Attorney General has not asserted he

made any efforts, informal or otherwise, to advise the PFRS

Board   of    Trustees       that    its   decisions    with    respect    to    what

constitutes creditable compensation for pension purposes under

N.J.S.A. 43:16A-1(26)(a) were legally incorrect and that there

was no arguable basis upon which the PFRS Board's decisions

could be defended in court.                As we noted in Gladden, whether a

state agency is abiding by a valid state law "is a fundamental

concern      of    the    Attorney    General    both   in     his    capacity    and



                                           49                              A-0083-11T2
responsibility as adviser to the agency and in his capacity and

responsibility as protector of the public."                          Ibid.     Had the

record in these appeals contained evidence of: (1) the Attorney

General's efforts to advise the PFRS Board of Trustees of the

proper     legal    interpretation         of     creditable    compensation         for

pension    purposes       under    N.J.S.A.      43:16A-1(26)(a),       and    (2)   the

PFRS Board of Trustees' defiant refusal to abide by the Attorney

General's opinion, the proper action should have been for the

Attorney General to petition this court under Gladden to compel

the PFRS Board of Trustees to abide by the Attorney General's

legal opinion.

      Instead,      the    Attorney      General    decided     to    represent      and

defend the legally untenable actions of the Acting Director to

unilaterally refuse to implement the final decisions of the PFRS

Board of Trustees.          This approach is both legally unsupportable

and   completely     unnecessary         because    it   promotes      ultra    vires,

self-help    actions       by     the   Acting    Director     and    overlooks      the

lawful    path     the    Attorney      General    could   have      followed     under

Gladden.

      The Legislature placed the Division of Pension and Benefits

within the Treasury Department and appointed the State Treasurer

or the deputy State Treasurer as a permanent member of the PFRS

Board of Trustees.              N.J.S.A. 43:16A-13(a)(2)(b).             Considering




                                           50                                  A-0083-11T2
the   five    public   members     who   are   appointed         by   the   Governor,

N.J.S.A. 43:16A-13(a)(2)(a), the Legislature structured the PFRS

Board of Trustees in a manner that gives the Executive Branch a

permanent majority of six presumably "disinterested" members on

this eleven-member Board.           Although the PFRS Board of Trustees

can function and transact business with six members present,

N.J.S.A.     43:16A-13(d)(6),      there      is   no    basis    to    presume    the

multiple permutations of the makeup of any six-member majority

will necessary favor any particular point of view.                          Thus, as

matter of fact, the composition of the PFRS Board of Trustees

does not favor those most affected by its decisions.

      However, we do not mean to suggest or imply there are valid

reasons      to   question   the   objectivity      or    impartiality        of   the

remaining five members of the PFRS Board of Trustees, merely

because they are selected from the ranks of police officers and

firefighters.       We presume all of the members of the PFRS Board

of    Trustees     will   carry    out     their    duties        and   obligations

faithfully, impartially, and according to law, regardless of how

they are selected.           In fact, this court has a longstanding,

well-established view that citizens who serve on these pension

boards

              are fiduciaries and therefore have a duty to
              protect the fund and the interests of all
              beneficiaries thereof.   They must exercise
              due    care,   diligence   and    skill   in



                                         51                                  A-0083-11T2
               administering the trust. . . . It would not
               serve the statutory policy to pay out moneys
               to those not entitled thereto.

               [Mount v. Trs. of Pub. Emps.' Ret. Sys., 133
               N.J. Super. 72, 86 (App. Div. 1975).     See
               also Francois v. Bd. of Trs., 415 N.J.
               Super. 335, 357 (App. Div. 2010); Smith v.
               State, Dep't of Treasury, Div. of Pensions &
               Benefits, 390 N.J. Super. 209, 215 (App.
               Div. 2007); Fasolo v. Bd. of Trs., 190 N.J.
               Super. 573, 586 (App. Div. 1983).]

       Indeed, the PFRS Board of Trustees has excluded longevity

payments and other forms of individual salary adjustments after

having determined, based on the record of the particular case,

that     the     salary    adjustments       were   granted     primarily        in

anticipation         of   the   employee's     retirement     and     were      not

creditable for pension purposes as defined in N.J.S.A. 43:16A-

1(26) and N.J.A.C. 17:4-4.1.           Wilson v. Bd. of Trs. of Police

and Firemen's Ret. Sys., 322 N.J. Super. 477, 484 (App. Div.

1998).

       The system for administering the public pensions of police

officers       and   firefighters   was    established   with       the   primary

objective of inducing

               able persons to enter and remain in public
               employment, and to render faithful and
               efficient service while so employed.     They
               are in the nature of compensation for
               services previously rendered and act as an
               inducement   to   continued    and   faithful
               service.   Being   remedial  in    character,
               statutes   creating   pensions    should   be
               liberally construed and administered in



                                      52                                  A-0083-11T2
              favor   of  the   persons                intended          to   be
              benefited thereby.

              [Geller v. Dep't of the Treasury of N.J., 53
              N.J.    591,   597-98    (1969)   (citations
              omitted).]

       We discern no basis to conclude that the composition of the

PFRS    Board     of    Trustees     undermines          this      overarching          public

policy.       The five municipalities and four unions decided to

transcend      their     traditional       roles       as     antagonists          in     labor

matters     and   speak    with      one   voice       here,       because       the    Acting

Director's ultra vires actions to refuse to implement the final

decisions of the PFRS Board of Trustees left them without any

other alternative.

       Left   unaddressed       by    this      court,       the    ad    hoc,     untenable

actions taken by the Acting Director would have left this public

pension in chaos, subject to the unfettered discretion of a

self-appointed "Board overseer."                   Those most affected by the

Acting Director's ultra vires actions, the thousands of retired

and    active     duty    police      officers,         firefighters,            and      their

families, would have been left in bureaucratic limbo, unable to

organize their financial affairs and rationally plan for their

future needs.          Even assuming the Acting Director acted in good

faith to preserve the actuarial integrity of the pension system

as    she   saw   it,    her   powers      to    act    in    this       fashion       must   be

expressly conferred by the Legislature.



                                            53                                         A-0083-11T2
      The current composition of the PFRS Board of Trustees and

the authority vested in it by the Legislature as the final arbiter

of what constitutes creditable compensation benefits as defined in

N.J.S.A. 43:16A-1(26)(a) or N.J.A.C. 17:4-4.1 is not new.                      It has

existed and functioned unchallenged heretofore for decades.                         Any

perceived or actual structural bias in its composition is a

matter for the Legislature to address.                "The wisdom of a statute

is not for the courts."              Dacunzo v. Edgye, 19 N.J. 443, 454

(1955).     See also State ex rel. B.P.C., 421 N.J. Super. 329, 347

(App. Div. 2011) ("Our role as a court is not to question the

wisdom of legislative enactments, but to enforce them as long as

they are not contrary to constitutional principles.").

      Based on the record presented by the nine appellants and

the   authority      the   Legislature       vested   in    the    PFRS     Board   of

Trustees, we hold the action of the Acting Director to refuse to

implement     a    final   determination      made    by   the     PFRS     Board   of

Trustees concerning what constitutes creditable compensation for

pension purposes under N.J.S.A. 43:16A-1(26)(a) in these cases

was   ultra       vires,   without    legal     force      or     effect.       Final

determinations of the PFRS Board of Trustees are reviewable only

by this court.       N.J.A.C. 17:4-1.7(e); R. 2:2-3(a)(2).

      So Ordered.




                                        54                                   A-0083-11T2
_________________________________

       ASHRAFI, J.A.D., concurring.

       I concur in the court's judgment but write to point out a

seeming incongruity in the process established by statute for

adjudicative decisions of the Board of Trustees of the Police

and Firemen's Retirement System (PFRS).

       In these appeals, the Division of Pensions and Benefits

(the   Division)   contends   the    appellant    municipalities      provide

accelerated longevity or seniority salary increments during the

later service years of their police officers and firefighters

and    those   salary   increments    should    not   be   credited    toward

calculating pension benefits.

       Under the PFRS, retirement benefits are typically available

after a PFRS member reaches age fifty-five and has completed

twenty years of service.        N.J.S.A. 43:16A-5.             The amount of

pension benefits is based on the member's "final compensation."

N.J.S.A.   43:16A-5(2)(b),    (3).     The     term   "final    compensation"

refers to the member's final year of service, N.J.S.A. 43:16A-

1(28)(a), or, alternatively for newer PFRS members, the average

of the three highest years of salary during all service years,

N.J.S.A. 43:16A-1(28)(b).       The word "compensation," is defined

by statute as "base salary          . . . which is in accordance with
established salary policies of the member's employer for all

employees in the same position . . . ."                        N.J.S.A. 43:16A-1(26).

The statute specifically excludes "individual salary adjustments

which    are    granted       primarily   in     anticipation          of   the   member's

retirement . . . ."             Ibid.

    In plainer English, the statutes provide that PFRS pension

benefits       are    to   be   calculated       using    the    member's      legitimate

final    or         highest     base    salary      and        not    enhancements        in

compensation          intended     to   increase         the    member's       retirement

benefits.

    The exclusion of atypical salary increases near the time of

retirement "protect[s] the actuarial soundness of the pension

fund by prohibiting the use of ad hoc salary increases intended

to increase retirement allowances without adequate compensation

to the [pension] fund . . . ."               In re Puglisi, 186 N.J. 529, 534

(2005)     (internal          quotation    marks         and    citations         omitted).

According to the Division, the employing municipality and the

employee       do    not   contribute     enough     to    the       pension   fund    from

short-term, pre-retirement salary increases to fund the higher

pension benefits that will likely be payable over many years of

retirement.

    In the appeals currently before us, the Division questioned

accelerated          salary      increments       granted        by     the       appellant




                                             2                                     A-0083-11T2
municipalities        after       the   PFRS       members'       twentieth   year     of

service.     For example, the Town of Harrison provides to its

police officers an additional two-percent longevity increment

every five years from completion of the fifth to the twentieth

years of service.            It then provides an additional two-percent

increment at the start of the twenty-third year of service and

yet one more two-percent increment at the start of the twenty-

fourth year.       See ante at ___ (slip op. at 8).                  Thus, Harrison's

longevity     increments          accelerate       after      the    twentieth      year,

increasing by four percent in just three years and one day of

additional service.           Similarly, the City of Linden provides to

some of its firefighters a $1,000 increment as "senior officer

pay"   beginning      in    the    fourteenth       year   of     service.     It    then

provides another $1,750 beginning in the twenty-first year and

still an additional $2,250 beginning in the twenty-fourth year

of service.        See ante at ___ (slip op. at 19).                       The Division

took the position that these later increments are granted in

anticipation       of      the     retirement        of     police     officers       and

firefighters and should not increase their pension benefits.

       The   unions        that    represent       the     PFRS     members   and     the

municipalities that negotiated those contract terms presented

arguments    and    information         to   the    PFRS    Board     of   Trustees    in

opposition to the Division's position.                        The Board then ruled




                                             3                                 A-0083-11T2
that   the    salary      increments    in       dispute    were      not    granted       to

enhance      retirement      benefits           and    should      be       included       in

calculating     the       pensions     of       retiring    police       officers      and

firefighters.        The Acting Director of the Division disagreed

with those rulings and declined to implement them.                             The court

holds today that the Acting Director was not authorized by the

Legislature to overrule the PFRS Board of Trustees.                              I agree

with that holding.

       The   court    reaches     no   conclusion          on   the     merits   of    the

dispute, that is, whether the disputed longevity and seniority

increments     are     consistent      with      the    statutory       definition         of

"compensation"       or    are   "individual          salary    adjustments      .     .   .

primarily in anticipation of . . . retirement," N.J.S.A. 43:16A-

1(26).       See ante at ___ (slip op. at 4).                      I, too, reach no

conclusion on the merits of the dispute, noting as well that

these appeals provide an inadequate factual record from which we

might have decided the issue had it been properly before us.1




1
  As far as I can tell, the record before the PFRS Board of
Trustees did not include information such as what the actuarial
costs of the increments are to the PFRS pension fund and, most
important, how frequently and quickly members retire after
receiving the increments.     It might have been relevant to
consider whether the accelerated longevity and seniority
increments help the municipalities retain in active employment
their highly-experienced police officers and firefighters or
whether the increments simply increase "final compensation"
                                                    (continued)


                                            4                                    A-0083-11T2
      My    present       concern      is       with   the    disparity       in    the

administrative and judicial review process of such decisions by

the PFRS Board of Trustees.                 It seems that an appeal can be

taken only when the Board decides a matter against the interests

of a PFRS member.         See N.J.A.C. 17:4-1.7.             In that circumstance,

the member has a right to appeal the adverse decision to this

court under Rule 2:2-3(a)(2).                However, if the decision of the

PFRS Board favors the member, there seems to be no interested

party who has a right to appeal.                  The employer municipality is

not   an   interested      adverse      party      because     it    negotiated     the

increments    and     is    not     itself       responsible        for    paying   the

increased     pension      benefits         during     the    members'      years    of

retirement.

      As these appeals illustrate, five municipalities and four

unions joined together and "speak with one voice," ante at ___

(slip op. at 4), in challenging the decisions of the Acting

Director.      Not    only       are   the       municipalities       bound    by   the

collective bargaining agreements they negotiated but they have a

financial interest in the enforcement of those agreements.                          The

municipalities      pay    the    salary        increments     out    of    their   own

coffers for a limited number of years until the police officer


(continued)
shortly before retirement of most officers and firefighters who
are eligible to retire.



                                            5                                 A-0083-11T2
or firefighter retires.            Then the burden falls on the PFRS to

pay   the    increased      pension      benefits          for        all   the     years     of

retirement.

      By    negotiating        terms    that       provide       favorable        retirement

benefits     to   their   employees,      the          municipalities         might    obtain

concessions       in   other    areas    of       negotiations         that   benefit       the

municipalities         financially.           In       Board     of     Trustees      of    the

Teachers Pension and Annuity Fund of New Jersey v. La Tronica,

81 N.J. Super. 461, 471 (App. Div. 1963), certif. denied, 41

N.J. 587 (1964), we described unusual salary arrangements in the

final years of a public employee's active employment as the

local employer's "grand gesture of farewell at little expense."

      In these cases, the Acting Director claims she refused to

implement the PFRS Board's decisions to protect the viability of

the pension fund for all PFRS members.                     It seems, however, that

the Legislature has afforded her, and the Executive Branch of

State government, no right to review the PFRS Board's decisions

or to appeal to this court.

      This    court's     decision      today          explains       the   statutory       and

regulatory provisions that establish the Division's and the PFRS

Board's relative authority in addressing the matters in dispute.

The   Division's       primary    function         is    administrative.             N.J.S.A.

43:16A-13(a)(8).          It    also    has       an    investigatory         and    referral




                                              6                                       A-0083-11T2
function    when      it   detects   salary    enhancements       that    may     be

contrary to the statutory definition of "compensation," N.J.A.C.

17:4-4.1(d), but it does not have adjudicatory responsibilities

or authority in determining what compensation should be credited

for purposes of calculating a member's pension rights.

       The court today holds that the Legislature has placed the

adjudicative function and authority exclusively with the PFRS

Board of Trustees.         Ante at ___ (slip op. at 46).            I am not as

certain as my colleagues that the Board's adjudicative authority

is exclusive, but I agree that no statute, regulation, or case

law cited to us grants the Acting Director power to review the

Board's decisions.         See N.J.S.A. 43:16A-13(a)(1) ("the general

responsibility for the proper operation of the retirement system

is hereby vested in a board of trustees . . . ."); N.J.A.C.

17:4-1.7 (setting forth procedures for a member's appeal to the

PFRS   Board    of    Trustees);     Hemsey   v.     Bd.   of   Trs.,    Police    &

Firemen's      Ret.    Sys.,   198    N.J.    215,     220-22    (2009)     (final

administrative decision issued by Board of Trustees); see also

Sellers v. Bd. of Trs. of the Police & Firemen's Ret. Sys., 399

N.J. Super. 51, 62 (App. Div. 2008) (Decision-making powers of

PFRS Board of Trustees include authority "to apply equitable




                                        7                                 A-0083-11T2
principles to provide a remedy when justice so demands, provided

the power is used rarely and sparingly . . . .").2

       While full adjudicative authority placed in such a board

may not be unusual, the Board of Trustees in this case is not

entirely    under         the    control    of       the    Executive       and    Legislative

Branches of State government.                    The eleven-person Board consists

of five positions that are reserved for and elected solely by

active    or    retired         police     officers         and   firefighters          who    are

members    of   PFRS.           N.J.S.A.     43:16A-13(a)(2)(c),                 (d);   N.J.A.C.

17:4-1.4(b).          Those five Board members may be adjudicating a

dispute about salary provisions that are the same as ones from

which they themselves benefit financially.

       In comparison, persons with similar conflicts of interest

would likely be excused for cause from serving on a jury that

was asked to decide the issue, although jurors too take an oath

to render a fair and impartial decision.                          See N.J.S.A. 2B:23-6.

I do not mean that a jury and an administrative board are the

same   kind     of    adjudicative         body.           I    use   the    analogy      as    an

illustration         of    the    impartiality             we   expect      in    governmental

2
  The Division does not argue that the Acting Director is the
"head of the agency" who, under the provisions of the
Administrative Procedures Act, N.J.S.A. 52:14B-1 to -15, must
issue a final agency decision in a contested pension benefits
case, N.J.S.A. 52:14B-10.     Also, the Division has not cited
N.J.S.A. 52:14B-8 as supporting a declaratory ruling of the
Acting Director with respect to the disputed salary provisions.



                                                 8                                      A-0083-11T2
adjudication of factual disputes.                  Nor are my comments intended

to criticize the membership of the PFRS Board of Trustees.                              I do

not denigrate the integrity and good faith of the police and

firefighter members of the PFRS Board of Trustees any more than

a   trial    judge    denigrates       the    integrity      and    good    faith       of   a

potential juror who is excused from a case.

       Whatever the Board's membership may be, my comments are

primarily directed to the absence of administrative and judicial

review of its decisions when they are favorable to the PFRS

member.       If   such        decisions    of    the   Board     are    final    and    the

Director      of     the       Division     has    no     power     to     review       them

administratively          or    to   decline      to    implement       them,    then    the

Executive Branch is seemingly without recourse in protecting the

pension fund against a legally erroneous or skewed ruling of the

Board.

       The court's decision today explains the unusual procedural

steps taken by the State Attorney General after a disagreement

with   the    Board       of    Trustees     of    a    similar    public       employees'

pension fund.        See Gladden v. Bd. of Trs. of the Pub. Employees'

Ret. Sys., 171 N.J. Super. 363, 367-68 (App. Div. 1979).                                 The

court suggests that the Attorney General could similarly have

advised     the    PFRS    Board     in    these   cases    that    its     actions      are

contrary to law and then pursued a remedy in this court if the




                                             9                                    A-0083-11T2
Board refused to heed the Attorney General's advice.                                       Ante at

___ (slip op. at 49-50).

       The Gladden decision, however, only came before this court

for judicial review because the Board of Trustees in that case

decided     the    matter         against    the       interests         of    the   prospective

member of the pension fund, Gladden, and he filed the appeal.

Gladden,        supra,   171       N.J.     Super.      at        367.        Had    the   Board's

decision been in favor of Gladden, there would have been no

appeal and no judicial case in which the Attorney General could

have    intervened       to       resolve     a    disagreement           with       the   Board's

decision.        In the absence of an appeal by a party that has the

right      to    appeal,      I    am     unable       to    identify         what    procedural

mechanism the Attorney General might have employed to make a

direct application to this court, which is not normally a court

of original jurisdiction.                   See R. 2:10-5 ("The appellate court

may exercise such original jurisdiction as is necessary to the

complete determination of any matter on review.").

       I   also    question        the    lack     of       any    record      in    these    cases

stating the reasons supporting the final rulings of the PFRS

Board of Trustees.                The Division and the Board explained their

determinations when initially deciding these matters against the

interests of PFRS members.                   But the Board's subsequent rulings

in favor of PFRS members consist only of terse letters from the




                                                  10                                       A-0083-11T2
Board secretary stating the result without further explanation.

Not even a tally of the Board's vote is provided.

       As the Legislature has devised the PFRS and its Board of

Trustees, there seems to be no opportunity for judicial review

when the PFRS member obtains a favorable decision from the PFRS

Board of Trustees and when the pension fund is thus obligated to

pay a higher pension.            While that result may not be different

from    the    procedures      applicable     to    other   adjudicative   boards,

these    cases    seem    to    differ     in      that   the   Governor   and   the

Legislative Branch have only partial control of appointments to

the     PFRS    Board    of    Trustees,      see    N.J.S.A.    43:16A-13(a)(2).

Consequently, the PFRS Board of Trustees seems to have powers

beyond that of other adjudicative boards within our State system

of governance.

               I concur in the court's judgment because I agree that

the applicable statutes and regulations do not authorize the

Acting Director effectively to overrule decisions made by the

PFRS Board of Trustees by declining to implement them.




                                         11                                A-0083-11T2
