On appeal from Board of Trustees, Public Employees' Retirement System, Division of Pensions.
Botter, King and McElroy.
[180 NJSuper Page 2] Petitioners, parents and designated beneficiaries of their daughter's group life insurance policy, appeal from the determination of the Division of Pensions which denied group life insurance death benefits as provided by statute. N.J.S.A. 43:15A-41(c) (noncontributory insurance benefit) and N.J.S.A. 43:15A-57 (contributory insurance benefit). The facts are not in dispute.
Petitioners' 21-year-old daughter became a permanent county employee on June 9, 1978. By application dated July 12, 1978 she sought enrollment in the Public Employees' Retirement System (PERS), designating her parents as cobeneficiaries of her group life insurance and indicating that she chose to enroll in the retirement system "as of the first day of the month: 4 months after Permanent Appointment." The effective date of her enrollment in PERS and of her insurance coverage would have been November 1, 1978.
However, on October 27, 1978 Muriel made a written request for a six-month leave of absence without pay commencing November 1, 1978 due to personal illness. The leave was approved commencing November 1, 1978. No deductions from salary for pension and insurance purposes were ever made. On November 15, 1978 Muriel was killed in a car accident.
Petitioners, as designated cobeneficiaries, sought payment from the Division of Pensions of life insurance death benefits, both contributory and noncontributory. Benefits were denied on the ground that Muriel "was not actively at work on November 1, 1978 and therefore her membership [in PERS] did not become effective as of that date." Petitioners objected to PERS' denial of the death benefits and asked for a hearing.
The matter was heard by an administrative law judge who denied the claim on the ground that the statutory scheme provides death benefit coverage only for a "member in service," citing N.J.S.A. 43:15A-41(c)(1) and (2), and N.J.S.A. 43:15A-57(c) and (g). Decedent was not found to be a "member in service" on November 1, 1978. Appellants concede that contributory death benefits under N.J.S.A. 43:15A-57 are not payable by the terms of the statute, but contended below and contend here that PERS is estopped from denying coverage on the facts of this case. The claim of estoppel was also rejected below. The board of trustees adopted the findings and conclusion of the
administrative law judge "consistent with" its "original determination" and denied petitioners' request for death benefits. This appeal followed.
N.J.S.A. 43:15A-41(c) provides in relevant part that upon the death of "a member in service" (for which accidental death benefits are not payable), the member's beneficiary shall be paid (1) the member's accumulated deductions at the time of death, plus interest, and (2) one and one-half times the compensation upon which "contributions by the member" were based. N.J.S.A. 43:15A-57(c) provides for additional death benefit coverage on a contributory payment basis for a member of PERS "from the first day of his membership on which he is actively at work and performing all his regular duties at his customary place of employment." It is this last-quoted language which concededly precludes recovery of the contributory insurance benefits. However, appellants contend that decedent was a "member in service" within the meaning of N.J.S.A. 43:15A-41(c) and that the absence from this section of language similar to that contained in N.J.S.A. 43:15A-57(c) requiring the actual performance of customary duties means that such a condition does not apply to the noncontributory benefits.
We are not concerned here with a death benefit claim of an employee who has been a member of PERS for some time and dies while on a leave of absence. See N.J.S.A. 43:15A-108.*fn1 What PERS originally held, as we view it, is that because Muriel Burns was not actually working on the date of her enrollment in PERS she was not, therefore, "a member in service" for group life insurance benefit purposes. This view has been incorporated in N.J.A.C. 17:2-4.13, which provides:
All employees, otherwise eligible, who are not actively employed on the date of their enrollment will not be covered by the group life insurance ...