The issue in this appeal is whether a widow can modify the retirement application of her recently deceased husband, who was a member of the Teachers’ Pension and Annuity Fund (Pension Fund), even though his application was never approved because he selected a retirement option for which he was ultimately ineligible.
David and Christine Minsavage were married and had four children. David had served as a math teacher for more than 24 years when he was diagnosed with terminal stage pancreatic cancer in August 2014. In November 2014, following advice allegedly provided by a New Jersey Education Association representative, David selected the “early retirement” option on his retirement application. Early retirement eligibility requires 25 years of teaching service.
On April 9, 2015, David passed away, having accumulated just over 24 years and 9 months of teaching service over the course of his career. Less than 2 weeks after David’s death, the Board of Trustees of the Pension Fund (the Board) notified Christine that David’s retirement application would not be approved because he had not completed 25 years of teaching service. Had he lived to teach until July 1, 2015, David would have been eligible under the early retirement option, and his beneficiary — his widow Christine — would have received $3,423.06 each month. Because David did not qualify for the early retirement selection, Christine was entitled only to reimbursement of David’s pension contributions and a group life insurance benefit.
Because David did not live long enough to qualify for early retirement, his family would have been entitled to greater benefits had he selected and qualified for “ordinary disability,” rather than “early retirement,” on his retirement application. As a result, Christine sought to modify David’s retirement application to select the ordinary disability option.
The Board denied Christine’s request on the ground that the Pension Fund’s “administrative regulations do not allow for retroactive disability retirement applications, and become effective only on or after the date of filing.”
Christine appealed to the Superior Court of New Jersey, Appellate Division. The Appellate Division affirmed the Board’s decision, noting that it could not “rely on [Christine’s] hindsight to permit her to alter or amend [David’s] retirement application” because her proofs “fell short of establishing incapacitation” and because “[t]he plain [statutory] language . . . indicates it only applies to a retirement application the Board has already approved.”
Christine filed a Petition of Certification to the New Jersey Supreme Court, which was granted. On appeal, the Attorney General asked the Supreme Court to affirm the Appellate Division’s decision, arguing that David’s Pension Fund membership terminated upon his death, so he could not submit a new or modified retirement application after his death. The Attorney General also asserted that because David’s application was never approved and thus never became due and payable, his application could not be modified.
The Supreme Court reversed the judgment of the Appellate Division and remanded the matter to the Board to determine if David would have qualified for ordinary disability benefits had he selected the ordinary disability option on his retirement application.
The Supreme Court held that neither membership nor prior approval of a retirement application is required for modification of a retirement selection where good cause, reasonable grounds, and reasonable diligence are shown.
The Court confirmed that pension statutes should be liberally construed and administered in favor of the persons intended to be benefited thereby. The common law “establishe[s] that the Board may honor a pensioner’s request to reopen her retirement selection” upon “a showing of good cause, reasonable grounds, and reasonable diligence” even “after it is due and payable.” Therefore, an application for pension benefits may be amended whether or not pension benefits are due and payable upon the proper showing. The interests of justice and a liberal reading of the applicable pension laws required that the Court give Christine an opportunity to prove at a hearing that she exercised reasonable diligence and seeks to modify David’s retirement selection for good cause upon reasonable grounds.
The Supreme Court case is annexed here – Christine Minsavage v. Board of Trustees, Teachers’ Pension and Annuity Fund
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