The Intricacies of Collecting Retirement Benefits While Continuing To Work In Law Enforcement
Most recently, the New Jersey Supreme Court heard argument and deceided the case of Hemsey v. Police and Firemen's Retirement System, A-15 September 2008 Term, on Certification from the Appellate Division, 393 NJ Super 254 (App. Div. 2007).
Hemsey was hired as a police officer by the City of Trenton in 1973. In 1998, he retired and began receiving retirement benefits from PFRS. Most of his employment with the city was spent as a police dispatcher. In the same year that he retired, Hemsey entered into a consulting contract with the City of Trenton in which he worked directly under the Department's commanding officer and evaluated and worked with police and fire communication center personnel. In 1999, Hemsey was appointed to the position of Director of Communications. This was a newly created civilian position of employment.
Thereafter, PFRS requested information from the City regarding Hemsey'e employment and called Hemsey before the board to answer questions regarding the same. In October 2002, PFRS informed Hemsey that he was required to re-enroll in the reitement system due to the fact that the functions he was performing as a retiree were essentially the same duties that he was performing prior to retirement. As a result of the ruling, Hemsey's retirement benefits were cancelled retroactively to January 1, 1999. Hemsey appealed and the case was sent to the Office of Administrative Law as a contested case.
The OAL concluded that the retirement benefits were properly cancelled, with the Appellate Division affirming the decision. However, the Supreme Court for the State of New Jersey reversed the Appellate Division and held that the retirement benefits were improperly cancelled because there was insufficient evidence to conclude that the duties of the two positions were the same and the position of civilian director of communications started six (6) months after Hemsey retired from employment with the police department.
New Jersey law dictates that an individual who retires and then accepts employment in a PFRS covered position will lose retirement benefits and be required to re-enroll in PFRS, N.J.S.A. 43:16A-3.1. Hemsey successfully argued that his new position of employment did not meet the statutory requirements that mandated re-enrollment in PFRS. After a review of all of the credible evidence including testimony and the consulting contract itself, the Supreme Court agreed with Hemsey.
To simplify this case for retirees collecting a PFRS pension and still performing duties in a law enforcement capacity, you must be very careful that your new duties are not substantially the same or similar to the duties for which you are collecting the pension. Furthermore, the duties associated with the new position of employment must not meet the statutory definition of a PFRS covered position. Each case is different and will be evaluated on a case by case basis with a thorough evaluation of the facts. Its always advisable to research and evaluate the facts before you accept re-employment. It is much easier to draft an employment agreement that falls outside the statutory requirements of PFRS than to have your pension benefits cancelled, whereby you are left with no choice but to appeal the issue before the Office of Administrative Law.
