Irrevocable resignation nullifies disability retirement eligibility
NJ State PBA Legal Corner
By Robert A. Fagella, Esq. and Paul L. Kleinbaum, Esq.
A law enforcement officer is ineligible for disability retirement benefits if he or she irrevocably severs employment for non disability-related reasons. This principle, which applies to all state-administered pension systems, has been in effect for years. Yet some officers still resolve pending disciplinary or criminal charges with an agreement to irrevocably sever their employment as part of the settlement at the same time that they applied, or intend to apply, for accidental or ordinary disability benefits.
Law enforcement officers should be very cautious about entering into any settlement agreement that irrevocably severs their employment if they also intend to apply, or have applied, for disability retirement benefits. A recent decision of the appellate division highlights the pitfalls of such a decision.
In Slimm v. PFRS, a Winslow Township officer applied for accidental disability retirement benefits in October 2018. He alleged that he suffered from PTSD following an incident in which a suspect opened fire during a vehicle pursuit. Shortly thereafter, the township ordered the officer to return to work, and he refused to do so. The township subsequently served the officer with disciplinary charges and several
offenses, including failure to report to work, and also suspended him without pay pending the outcome of the disciplinary action.
In January 2019, the officer and the township entered into a settlement agreement. The township agreed to dismiss the pending disciplinary charges in return for the officer’s agreement to irrevocably sever his employment with the township – whether his disability pension application was granted or not. The settlement agreement also noted that the officer intended to pursue his pension application, but it did not state that the alleged disability was the reason for his irrevocable resignation.
The PFRS Board of Trustees advised the officer that it would not process his disability retirement application. The board explained that he was not eligible for a disability pension based upon state law and regulation, specifically N.J.A.C. 17:1-6.4 and N.J.S.A. 43:16A-8(2), because he irrevocably severed his employment with the township. Under New Jersey law, any employee who retires on a disability pension must be able to return to work if the disability diminishes or disappears. Under regulations governing pensions, a member is barred from applying for disability retirement if the member irrevocably severs employment based on a settlement of disciplinary or criminal charges unless the underlying charges relate to the disability.
The officer filed an appeal, and the case was transferred to the Office of Administrative Law for a hearing before an administrative law judge (ALJ). In response to a motion filed by the PFRS board, the ALJ granted the board’s motion and concluded that the officer was not eligible for disability retirement benefits. The ALJ’s decision held that because the officer severed his employment, he would not be eligible to return to work if his disability diminished or disappeared. The PFRS Board of Trustees adopted the ALJ’s decision. The officer appealed.
The appellate division affirmed the PFRS Board of Trustees’ decision. The court relied upon a 2019 Appellate Division decision, Cardinale v. PFRS, 458 N.J. Super. 260 (App. Div. 2019), in which the court held that a member’s irrevocable resignation from active service made him ineligible for disability retirement benefits. State law, specifically N.J.S.A. 43:16A-8(2), requires an officer to return to work if his or her disability diminishes or disappears, and an irrevocable severance of employment would not permit the officer to return to work in that situation. In short, an officer is simply not eligible for disability benefits if the officer irrevocably severs his or her employment.
One exception to this settled principle is if the officer’s irrevocable
resignation is directly related to his or her disability.
In other words, the settlement separating the officer from employment must be based on the officer’s inability to work. The court emphasized that, in this case, there was nothing in the settlement agreement that tied the officer’s irrevocable resignation to the disability and nothing in the settlement agreement to suggest that the officer’s resignation was based upon his alleged disability. Instead, the court noted that the officer resigned to avoid having to litigate the pending disciplinary charges.
The lesson of this case should be clear and is worth mentioning again even though it has been discussed on many occasions at PBA meetings and conferences. An officer who may be eligible for disability retirement benefits should avoid, if at all possible, settling pending administrative or criminal charges with an irrevocable severance of employment unless the severance is directly related to the disability and that connection is cited in the settlement agreement. The PFRS board will not process a disability pension application if an officer settles disciplinary or criminal charges with an agreement to irrevocably resign unless the underlying charges relate to the officer’s disability. Law enforcement officers should not try to settle these cases on their own but should consult with knowledgeable and experienced attorneys.