New Jersey Supreme Court Oral Argument in Thomas Saccone v. Board of Trustees of the Police and Firemen’s Retirement System

Video of Oral Argument before the New Jersey Supreme Court in Thomas Saccone v. Board of Trustees of the Police and Firemen’s Retirement System held on February 4, 2014 in Trenton, NJ.

On February 4, 2014, Donald Vanarelli, Esq. argued before the New Jersey Supreme Court on behalf of Thomas Saccone in a case entitled Thomas Saccone v. Board of Trustees of the Police and Firemen’s Retirement System. Legal counsel for four disability rights organizations filed amicus curiae, or friend of the court, briefs on behalf of Mr. Saccone, and participated in oral argument.

Thomas Saccone is a retired Newark, NJ fireman with a severely disabled adult child named Anthony. Anthony lives with his parents, is unable to work, has been found to be totally disabled by the Social Security Administration, and has for many years received Supplemental Security Income (SSI) and Medicaid, public benefits based on need. These public benefits are critical in meeting Anthony’s care needs.

Tom retired in 2000 and was approved for benefits from the Police and Firemen’s Retirement System (“PFRS”), effective December 1, 2000. In order to structure his estate plan to provide for Anthony after Tom’s death without jeopardizing Anthony’s eligibility for needs-based public benefits, Tom executed a Last Will and Testament containing a testamentary special needs trust (“SNT”), and left his entire estate to the SNT in his will. Anthony is the sole beneficiary of the SNT.

In August 2008, by way of beneficiary designation, Tom asked the PFRS to pay the survivor benefits to which Anthony would be entitled upon Tom’s death to the SNT established under Tom’s will in order to protect Anthony’s eligibility for public benefits. Those death benefits included the payment of pension death benefits to the retired member’s children.

The PFRS denied the request based on N.J.A.C. 17:4-3.5, as amended eff. 4/3/06, which prohibits a retiree from designating a primary or a contingent beneficiary for the receipt of the retiree’s accumulated pension contributions in the event of the retiree’s death. The pension board said:

[It c]ould not comply with your request to pay a trust, instead all monthly pension death benefits must be paid to a named beneficiary or the check could be sent to ‘in care of’ anyone designated to act as the trustee for the trust.

Thereafter, Tom appealed the PFRS decision administratively to the Division of Pensions and Benefits (pension board), which affirmed the denial, and then to the Appellate Division of New Jersey’s Superior Court, which affirmed the decision of the pension board. Thereafter, the New Jersey Supreme Court granted our Petition for Certification and “summarily reversed” the Appellate Division, remanding the case back to the PFRS to decide the case on the merits.

On remand, the Board again concluded that Tom was not permitted to designate the SNT as a beneficiary of his public pension death benefits. Tom again appealed to the Appellate Division of the New Jersey Superior Court, which again affirmed the pension board’s decision denying Tom’s request to designate a testamentary SNT as beneficiary of his pension death benefit. The appeals court concluded that the pension board did not violate public policy in denying Tom’s application, and suggested that there were other ways the public pension death benefit could be distributed to Anthony without jeopardizing Anthony’s public benefits. We then filed a second Petition for Certification to the New Jersey Supreme Court, which was granted.

On September 11, 2014, the New Jersey Supreme Court, reversing contrary decisions by all lower courts and administrative agencies that considered the matter, ruled that the disabled child of a retired fireman may have his survivors’ benefits paid into a special needs trust rather than directly to the child, thereby allowing the child to maintain eligibility for Medicaid and other public benefits based on financial need. Saccone v. Police and Firemen’s Retirement System, Docket No. A-49-071841 (September 11, 2014)