Halpern, Matthews and Bischoff.
Petitioner Rose F. Vaccaro appeals from a decision of the Board of Trustees of the Division of Public Employees' Retirement System (Board), denying her application for disability retirement benefits under Option 1 of N.J.S.A. 43:15A-50.
The relevant facts are undisputed. Petitioner is the widow of Charles Vaccaro (decedent) who died on November 12, 1971, and is the beneficiary designated by decedent under Option 1 to receive the benefits of his retirement allowance. Decedent had been employed by the State Department of Transportation since 1952 and was a member in good standing of the Public Employees' Retirement System. During the summer of 1970 decedent was stricken and hospitalized with lung cancer. He returned to work but was again compelled to stop work because of his illness, and he was given a leave of absence from June 10, 1971 to September 10, 1971. During this three-month period he received medical treatments, of various types, in an attempt to arrest or cure his cancerous condition. By July 26, 1971, the doctors determined that decedent's illness was terminal, and that he would be unable to return to work.
On July 28, 1971 decedent filed his signed application for disability retirement benefits under Option 1 of N.J.S.A. 43:15A-50,*fn1 with the request it be effective as of August 1,
1971. The application was received by the Board on July 30, 1971. Due to decedent's inability to go to a doctor's office for a physical examination, the Board on August 4, 1971 directed Dr. Leo Goldman to examine decedent at his home. On or about September 1, 1971 decedent was again hospitalized for his illness, and the Board was notified on September 3, 1971 that Dr. Goldman had not yet made the examination. By letter of September 7, 1971 the Board directed Dr. Howard Levenson to make the examination at the hospital. Dr. Levenson made the examination on the same day, and his report of September 17, 1971 was received by the Board on September 20, 1971. On the next day the Board sent decedent's application, together with the supporting medical data, to the Board's Medical Review Board for its consideration. The Medical Review Board's report of October 4, 1971 was then sent to the Board. On October 19, 1971 decedent's retirement application was granted. It took 2 months and 20 days to process decedent's application.
The Board denied petitioner's claim for retirement death benefits on the basis that decedent had died on November 12, 1971, within 30 days of the date of the granting of his application on October 19, 1971. At the hearing before the
Board's designated Hearer, petitioner asserted that the Board improperly invoked the statutory time requirements since it was the Board's inefficiency in processing the application that permitted the 30-day statutory limitation period to be set up as a bar to the claim. The hearer determined the application was handled in a proper businesslike manner, and since petitioner failed to show bad faith on the Board's part, he recommended the application be denied. The Board, after considering the record, adopted the hearer's recommendation.
The narrow issue on appeal is whether the Board, with full knowledge of decedent's terminal illness, processed his application with reasonable dispatch. Unfortunately, the statute does not designate how soon an application should be processed. It merely denies benefits under Option 1 if the applicant dies within 30 days "after the date of retirement [here August 1, 1971] or the date of board approval [here October 19, 1971], whichever is later, his retirement allowance shall not become effective and he shall be considered an active member at the time of death."
Normally, pension statutes should be liberally construed in favor of employees eligible for retirement. In re Application of Smith, 57 N.J. 368, 374 (1971). We must assume that the Legislature intended that retirement applications be processed promptly and with due diligence, depending upon the circumstances existing in each case. Therefore, the Board's failure to act with due diligence should not bar recovery of benefits to one otherwise legally entitled thereto.
The Board's sole contention is that it did act diligently, and that it processed decedent's application within the normal time span of between two and five months. It asserts that for the year 1971 it acted on about 550 retirement applications. It stresses the fact that it is difficult to get doctors to make necessary physical examinations at a patient's home. The record indicates that in processing applications the Medical Review Board convened twice a month, and the Board of ...