Stanley Kossup started working for the City of Newark, New Jersey, as a firefighter in 1959. In 1979, he was appointed Fire Chief, a civil service-protected operational position involving the direct supervision of firefighters, including personal attendance at multiple alarm fires.
In 1988, Kossup was promoted to Director of the Fire Department, a civilian administrative and policy position that did not involve supervising firefighting operations. Since as Director he served at the pleasure of the Mayor and had no civil service protection, Kossup took a leave of absence from his Fire Chief position in order to protect his right to return to that civil service position.
In 1991, the City of Newark was experiencing a severe fiscal crisis. As a result, the Mayor decided to temporarily combine the positions of Fire Chief and Fire Director, and also to combine the positions of Police Chief and Police Director. At the Mayor’s request, commencing in 1991, Kossup agreed to perform both the Fire Chief and Fire Director positions. He continued to receive the Director’s salary, which was higher than the Chief’s salary; he received no extra salary for taking on the additional duties as Chief.
Kossup had enrolled in the Police and Firemen’s Retirement System (PFRS) from the beginning of his employment with the City and continued to contribute while he was Fire Director. When he served in the dual role of Director and Fire Chief, he contributed to the PFRS system at the lower salary rate applicable to the Chief position. Therefore, he was accumulating pension credit based on a lower salary than if he had contributed based on the Director’s salary.
In 1998, when he was simultaneously serving in both positions, the PFRS Board required him to retire from the Fire Chief position because he had reached age 65. Kossup applied for his PFRS pension based on the $85,000 salary of a Fire Chief and not based on the higher Fire Director’s salary. On July 20, 1998, the Board approved Kossup’s pension based on a percentage of the Chief’s salary.
At the time Kossup retired in 1998, the City’s financial situation had improved to the point where it was again possible to separate the Fire Chief and Fire Director positions as well as the Police Chief and Police Director positions. Because Kossup had extensive experience in firefighting and was considered the best candidate for the Director position, the Mayor re-appointed Kossup as Director, effective July 1, 1998. A fire captain, Edward Dunham, was promoted to replace Kossup as Fire Chief.
After learning that he was continuing to serve as Director, the Board notified Kossup in 1998 that he was not eligible for retirement benefits because he remained in a title (Director) that the Board contended was covered by the PFRS system. Kossup appealed, and won his case before a New Jersey Appellate Court.
The Court found that “under the unique facts of this case, denying Kossup his pension would be inequitable as well as inconsistent with the legislative policy to benefit rather than penalize firefighters who are promoted into administrative fire director positions. Further, since a PFRS member who retires at age 65 can no longer re-enroll in or contribute to the PFRS system, we conclude that the state statutes do not bar such a retiree from taking a position as fire director while collecting a PFRS pension.
“The Legislature was well aware, however, that PFRS retirees would frequently take other government employment after their PFRS retirement. In the committee hearings on the 1989 amendments, there were repeated references to this practice, and it was a fact of life the Legislature evidently accepted. It was part of the trade-off for encouraging, and requiring, police and firefighters to retire from their PFRS-covered positions. If the Legislature disapproved this practice, they could have prohibited it when they amended the PFRS statute to provide increased pension benefits to PFRS retirees.”
Kossup v. Board of Trustees, 2004 WL 2358258 (N.J.Super.A.D. 2004).