January 29, 2016

Additional member service credit in a public retirement system is not available to a retired public employee upon reemployment unless he or she discontinues receiving his or her retirement allowance

Additional member service credit in a public retirement system is not available to a retired public employee upon reemployment unless he or she discontinues receiving his or her retirement allowance
Regan v DiNapoli, 2016 NY Slip Op 00415, Appellate Division, Third Department

C. Murray Regan served as a teacher and, in that capacity, he was a member of the New York State Teachers' Retirement System [TRS] for over 30 years when, in January 1998, he simultaneously began to serve as an elected town supervisor. In this latter capacity, he was also a member of the New York Stateand Local Retirement System [ERS].

Regan was subsequently advised by a representative of ERS that he could retire from teaching and continue to accrue service credit in the ERS "[a]s long as [he] continue[d] as an elected official." Regan then retired from teaching in July 1998 and began collecting his retirement allowance from the TRS while continuing to receive his salary as a town supervisor.*

Regan was unsuccessful in his bid for reelection as town supervisor in 2001 and applied for ERS retirement benefits. ERS, however, denied his application, finding that he had not yet accrued the required minimum amount of service credit. In 2004, Regan regained elective office, this time as a village justice and served in that position for eight years during which period he received both his TRS retirement allowance and a village justice's salary. During this time period the ERS sent him annual updates indicating, among other things, that he was also accruing service credit.

Regan decided not to seek reelection to his position as a village justice for the term starting in 2012 and again applied to ERS for retirement benefits. Again, ERS rejected his application, this time explaining that he was ineligible for retirement benefits and its prior advice and updates had been erroneous because, upon acceptance of his position as an elected village justice in 2004, he had not suspended receipt of his TRS pension benefits. Accordingly, said ERS, he did not resume accruing service credit in ERS.**

After exhausting his administrative remedies in an unsuccessful attempt to overturn the denial of his application for additional ERS service credit, Regan nitiated and Article 78 proceeding only to have Supreme Court deny his request for additional service credit and dismiss his petition. Regan appealed the Supreme Court’s ruling to the Appellate Division.

Regan contended that Civil Service Law §150 permits him to receive both his TRS retirement allowance and his salary as an elected official while simultaneously accruing service credit toward an ERS retirement allowance. However, the Appellate Division said it could not agree based upon its review of the language of the statute and the legislative intent behind it.

The court explained that “As relevant here, Civil Service Law §150 generally prohibits receipt of both a public pension and a salary as a public official or employee, but also provides an exception for public pensioners who become elected officials — such as [Regan].”

Although the Appellate Division said that it agreed that this exception allowed Regan to receive a salary as an elected official without suspending his TRS retirement allowance, it noted that Civil Service Law §150 “makes no express mention of service credit” and, instead, refers only to pension benefits that have already been "awarded or allotted." 

Further, noted the court, the legislative history of the measure indicates that the original purpose behind the exception for public pensioners who subsequently become elected officials was to encourage continued civic engagement by "allow[ing] a retired public employee to seek elected public office and continue to receive his/her public pension benefits." Thus, said the court, in its view, “the statute allows public pensioners to continue receiving the benefits they have already earned while also serving in paid elective office, but it does not provide for the accrual of additional credit for new or greater pension benefits.”

Regan also advanced the argument that ERS should be “equitably estopped from denying him additional service credit because his career decisions were based, in part, upon incomplete advice and erroneous information provided by ERS employees regarding his ability to earn such credit.”

The Appellate Division rejected Regan theory of equitable estoppel, explaining that the doctrine of equitable estoppel generally cannot be invoked against a state agency unless “there has been a showing of fraud, misrepresentation, deception, or similar affirmative misconduct, along with reliance thereon.”

Noting that ERS “readily conceded that mistakes were made regarding the information provided to [Regan],” the court said it found no evidence in the record that any of those mistakes rise above the level of "erroneous advice [given] by a government employee[, which] does not constitute the type of unusual circumstance contemplated by the exception" to the doctrine.

* §150 of the Civil Service Law mandates the suspension of the “pension and annuity”  being paid to a retiree less than 70 years of age by a public retirement of this State except as otherwise permitted by §§101, 211, and 212 of the Retirement and Social Security Law, and by §503 of the Education Law, upon the employment of the retiree in “any office, position or employment in the civil service of the state or of any municipal corporation or political subdivision of the state to which any salary or emolument is attached, except jury duty or the office of inspector of election, poll clerk or ballot clerk under the election law, or the office of notary public or commissioner of deeds, or an elective public office.”

** The court noted that Retirement and Social Security Law §40(c)(9), provides that a retired public employee entitled to public pension benefits who subsequently accepts a new public service position is considered to be an active member of the retirement system only if the pension benefits to which he or she is entitled are suspended during his or her active membership.”

The decision is posted on the Internet at:


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