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In re Mullen

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION


July 19, 2007

IN THE MATTER OF MARGARET MULLEN FOR PATRICK J. MULLEN (DECEASED).

On appeal from the Board of Trustees of the Public Employees' Retirement System, Department of Treasury, 2-10-193543.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued May 8, 2007

Before Judges Skillman, Lisa and Holston, Jr.

This appeal involves the privilege of a State employee enrolled in the Public Employees' Retirement System (PERS) to convert a group life insurance policy, pursuant to N.J.S.A. 43:15A-93, to an individual policy upon retirement, and the consequences of the failure to exercise the privilege during the employee's lifetime allegedly based upon misinformation provided by representatives of the employing agency and the Division of Pensions and Benefits (Division). The PERS Board of Trustees issued a final decision denying the application of appellant, Margaret Mullen, the daughter of the deceased employee, Patrick J. Mullen, for payment of the full life insurance proceeds that would have been due had Patrick exercised his conversion privilege. The Board further determined that no material facts were in dispute and accordingly denied Margaret's alternative application for referral to the Office of Administrative Law (OAL) for a hearing.

When Patrick filed his retirement application, he was terminally ill. Family members made inquiries of his employing agency and the Division regarding benefits due. Appellant contends that misinformation was provided to the effect that no conversion was necessary and that Patrick's retirement beneficiary, his wife, Judith Mullen, would receive for the remainder of her life the applicable monthly pension benefit, and that Patrick's life insurance beneficiary, Margaret, his daughter by a prior marriage, would receive the full amount due under the group life insurance plan. The Board determined that under the applicable statutes, regulations and case law, the failure of Patrick to convert the policy prior to his death precluded recovery of both benefits. As a result, Margaret received a reduced death benefit of $14,561.81, instead of the full death benefit of $232,920.40.

Margaret argues on appeal that (1) pursuant to the plain language of N.J.S.A. 43:15A-93, the life insurance coverage was subject to automatic conversion, (2) the case law relied upon by PERS does not apply because it failed to consider a circumstance in which separate individuals are designated as beneficiaries, and (3) because of the alleged misinformation, good cause exists for reopening the disposition of Patrick's benefits. We reject the first two arguments, but agree with the third. The record contains disputed issues of material fact which require resolution at an evidentiary hearing, and we remand for reference to the OAL for that purpose.

I.

Patrick began working for the New Jersey Department of Agriculture in 1972, and was enrolled in PERS. On March 27, 2003, Patrick went out on medical leave because he was diagnosed with terminal bile duct cancer. His final annual salary for pension calculation purposes was about $77,000.

On April 25, 2003, Patrick filed with the Division a new designation of beneficiary form, superseding others he had filed from time to time during his years of State employment. He designated Margaret as the primary beneficiary of his group life insurance and for return of accumulated deductions, naming Judith as the contingent beneficiary.

On July 29, 2003, Patrick applied for early retirement, effective October 1, 2003. On the application filed with PERS, he chose Option 2, by which his named beneficiary, upon his death, would receive a lifetime monthly allowance equal to 100% of his monthly allowance. He designated Judith as his retirement option beneficiary. He designated Margaret as his primary life insurance beneficiary, with Judith named as the contingent life insurance beneficiary.

On July 30, 2003, Patrick executed a will, in which he left his home to Margaret, but reserved to Judith a life estate. He directed Margaret to "pay off the mortgages on the property with the proceeds of [his] life insurance policy from work." According to Margaret, the mortgage balances approximated $200,000.

On July 31, 2003, Patrick died.

On August 4, 2003, the Division notified Margaret, acknowledging her father's death and advising that upon receipt of his employment records from the Department of Agriculture it would notify her of the benefits to which she was entitled. This letter was written without knowledge of Patrick's recent retirement application, but, instead, in reliance on the April 25, 2003 designation of beneficiary form, in which Margaret was designated as the primary beneficiary in all respects. On August 11, 2003, under the same misconception, the Division notified Margaret that she was entitled to her father's group life insurance proceeds totaling $232,920.40, and a return of employee contributions totaling $97,325.01. These were the benefits due assuming Patrick died in active status.

On August 14, 2003, the Division notified Judith, as the beneficiary of Patrick's pension benefits, that because her husband's death occurred after he "filed for retirement, but before the retirement became effective, [she could] choose to receive [her] benefits payment based on either the Active Status Option or the Retired Status Option." The letter advised that "[t]he two Options differ in the amount of the benefits, the manner of payment, and the potential taxes that you may have to pay." Choosing active status entitled her to a lump sum payment of $97,325.01, with a potential withholding of $18,030.00 for federal income taxes. The retired status option allowed Judith to receive a monthly pension of $3,200.40 for the rest of her life, effective October 1, 2003. No mention was made of life insurance benefits.

On August 19, 2003, the Division notified Margaret "that an error occurred in the processing of Mr. Mullen's claim" because the Division was unaware that an Application for Retirement Allowance Form had been filed at the time the claim was being processed. The Division informed her that "the Retirement Application, which supercedes all other designation of beneficiary forms, . . . designated his wife, Judith, as his beneficiary to receive the pension portion, and he chose you as his beneficiary to receive the group life insurance benefit." As a result, the Division advised that the "claim [was] now being processed in accordance with Chapter 221, which allows the beneficiary of the pension portion to choose an Active Status Benefit or Retired Status Benefit."*fn1 Therefore, Margaret was to "only receive the insurance portion of the death benefit[,] [t]he dollar value of which [was to] be determined when [Judith made] her decision."

On September 7, 2003, Judith elected to receive pension benefits under her husband's retired status. On October 28, 2003, the Division notified Margaret, by way of a "REVISED" letter, that as the beneficiary of the group life insurance policy, she was entitled to $14,561.81.

On January 21, 2004, Judith wrote to the Division seeking to convert the group life insurance alleging that representatives of the Department of Agriculture and the Division had provided misinformation in that regard. Specifically, Judith recounted that when it became apparent that Patrick's death was rapidly approaching, efforts were made to get his affairs in order, including the development of an estate plan and preparation of a will. She and her son by a previous relationship, Tom King, made inquiries about Patrick's benefits. She set forth in detail the following sequence of events:

We were told to contact Joanne Martin [a Division employee] at (609) 633-7906 to apply for a retirement date so that I, Judith N. Mullen, would receive spousal survivorship pension benefits under title 221. I drove to the department and obtained the forms that we needed to submit. One of the forms was to convert Mr. Mullen's group term life insurance over to an individual plan. We contacted Joanne Martin and she had us call Mr. Rick Pagan, the Prudential Group life insurance agent at (877) 889-2070. He suggested that we convert Patrick's group term life insurance to a non-medical policy that would have cost about $800 per month. He also stated that if we converted the life insurance, the family could receive the benefits of both the group and the newly converted life insurance policy. That statement caused some concerns so my son, Tom, contacted Joanne Martin and Marianne Kandrac [a Department of Agriculture employee]. They both stated that there was not a need to convert the group life insurance to the individual as the full group life insurance benefits of three times his salary or approximately $255,000 would be paid out plus the full pension benefits of $3,200 per month would be paid out to me. That information was very important as the life insurance benefits were going to be used to pay-off the mortgage with the remainder going to his legal children and I was to receive the survivor pension. We used that information from Joanne Martin and Marianne Kandrac to prepare and establish the will of Patrick and his lawyer acted on that information to finalize Patrick's estate.

Mr. Mullen submitted the forms requesting a future retirement date by fax to Joanne Martin at (609) 984-5990, on Tuesday, 29 July, 2003 and sent them to the benefits department that same day.

A week or so after Patrick passed away, I applied for the survivor benefits. I went into the benefits office and met with a benefits representative.

First I was informed that in error, they had sent a letter to Patrick's daughter wrongly listing her as his only beneficiary.

Secondly I was told the family was not going to receive the full life insurance benefits of $255,000 and I the full pension of $3,200 per month. A choice had to be made between active or retired benefits.

This is not what we had been led to believe by Joanne Martin. I left the office distraught and confused and had my son, Tom, call Joanne Martin. Tom spoke with her and she again stated that the family would receive the full life insurance amount of $255,000 and that I would receive the full pension of $3,200 per month. Joanne said that she would call and straighten everything out and get back with us. Later that day, Joanne called Tom and stated that she was incorrect with her current information and that yes, now we had to choose between the two choices. My son stated that Patrick's will was established on her information and that her misinformation left the family in financial distress. Joanne Martin replied to my son that I should take the employed option to receive the full life insurance amount to pay-off the mortgage. And Joanne Martin stated that since Tom was a financial advisor that he could take the return of Patrick's pension contributions or roughly $97,000 and invest that for me to generate an income. Tom stated that Joanne Martin's tone became crass and she did not apologize or attempt in any way or try to correct her egregious error. It seemed to us that she felt that her misinformation was no big deal and there was no cause for correction. We would have purchased the Full Group Life insurance if given the correct information.

I was directed to Mr. William Tedder [a Division employee] (609) 984-4398. He confirmed that Joanne Martin was incorrect in her original information and that a choice had to be made between the full life insurance and the full pension. We described what had transpired to Mr. Tedder and he did research to see if we could receive the full group life insurance of $225,000 along with the full retirement pension of $3,200. He said that if we had sent in the life insurance conversion paper work prior to Patrick's death to the benefits department that we could receive the full group life insurance of $225,000.

However, I was instructed by Joanne Martin and Marianne Kandrac not to submit the paperwork because it was not necessary as we were going to receive the full life insurance benefit of $255,000 along with the full survivors pension. If we were given the correct information and had converted the group life insurance policy to an individual policy this family would not had had to incur our current emotional or financial stress. Mr. Tedder suggested that I dispute what has transpired and send a letter to you to correct this egregious error.

On February 10, 2004, the Division denied Judith's request to convert the group life insurance:

A review of Mr. Mullen's file indicates that his stepson contacted the Division regarding his retirement benefits. Chapter 221 was explained to him and he was also advised to call Prudential Insurance Company regarding conversion of life insurance and was provided the toll free number. He subsequently picked up the retirement packet that included the Conversion of Group Life Insurance fact sheet and filing instructions.

Your letter stated, you (or your son) spoke with Richard Pogeny of the Prudential Insurance Company and he advised you to convert Mr. Mullen's group life insurance policy to a non-medical policy. He informed you of the monthly premium and stated that if Mr. Mullen's insurance were converted, his family would receive the full group coverage. Mr. Pogeny also forwarded a conversion packet to you.

On March 23, 2004, the Division again denied Judith's request to covert the group life insurance. The Division advised Judith of the right to administratively appeal the decision, but that Margaret, as the designated beneficiary, was the appropriate person to contest the amount of the benefits. The Division apologized for any "poor advice" received, but said that "the information provided was either misunderstood or misinterpreted."

Margaret pursued an administrative appeal. She informed the Division that "[i]t has been made aware to me that my father's wife has selected retired status benefits. I was unaware of his retirement at the time of my father's passing and was not made aware of any need to re-group his insurance policy, which greatly affects the monetary value of the insurance benefit." The Division informed her that Judith and her son, Tom, had received the necessary information regarding conversion and her claim for the full benefit was denied, and the matter was being referred to the PERS Board of Trustees for further review.

On April 21, 2005, the Board replied that in accordance with N.J.A.C. 17:2-3.13, since an application for conversion from the group life insurance plan to an individual policy was not filed timely with the Prudential Insurance Company of America, the PERS Board is unable to grant your request for additional life insurance benefits beyond the amount payable with the selection of retired status under the provisions of Chapter 221.

Margaret appealed the Board's determination and requested a hearing in the OAL. On November 10, 2005, the Board denied her request for a hearing, finding that the appeal involved solely a question of law. The Board found "that the statutory and regulatory language and case law . . . [were] clear and unambiguous." The Board concluded that pursuant to N.J.S.A. 43:15A-50 and N.J.A.C. 17:2-3.13 "an additional amount of insurance shall be paid as a claim under the group policy only if the member files an application for conversion of the insurance upon retirement." This appeal followed.

II.

PERS members are entitled to a death benefit equal to oneand-one-half times their last twelve months' salary. N.J.S.A. 43:15A-41c. They have the option of purchasing additional life insurance up to an additional one-and-one-half times that salary. See N.J.S.A. 43:15A-91, -92. Patrick exercised the option.

Generally, if a member dies while in active service, no pension benefit is payable, but the member's designated beneficiary or beneficiaries receive the applicable death benefit plus a return of pension contributions with interest. NJEA v. Bd. of Trs., PERS, 327 N.J. Super. 405, 408 (App. Div.), certif. denied, 165 N.J. 135 (2000). A retiring member receives pension benefits in accordance with the option chosen. N.J.S.A. 43:15A-50. If the retiring member does not convert the group life insurance benefit that was in effect during active service, the life insurance benefit reduces to three-sixteenths of salary. N.J.S.A. 43:15A-48c. Members are granted a conversion privilege:

Any such group policy or policies shall include, with respect to any insurance terminating or reducing because the member . . . has ceased to be in service or has retired, the conversion privilege available upon termination of employment as prescribed by the law relating to group life insurance . . . .

[N.J.S.A. 43:15A-93.]

The applicable "law relating to group life insurance" is found in N.J.S.A. 17B:27-72, which provides:

i. The policy shall contain a provision that, if the insurance . . . ceases because of termination of employment . . . , the person shall be entitled to have issued to him by the insurer, without evidence of insurability, an individual policy of life insurance without disability or other supplementary benefits, provided application for the individual policy shall be made, and the first premium paid to the insurer, within 31 days after termination . . . .

k. The policy shall contain a provision that, if a person insured under the group policy . . . dies during the period within which the individual would have been entitled to have an individual policy issued in accordance with subsection i. . . . , the amount of life insurance which he would have been entitled to have issued under the individual policy shall be payable as a claim under the group policy, whether or not application for the individual policy or the payment of the first premium therefor had been made. [N.J.S.A. 17B:27-72i, k.]

Thus, the above-quoted portion of N.J.S.A. 43:15A-93 authorizes conversion within the thirty-one-day period following termination of employment, which, of course, may occur by virtue of retirement. Consistent with the insurance laws set forth immediately above, N.J.S.A. 43:15A-93 further provides:

Any such group policy or policies shall also provide that if a member dies during the 31-day period during which he would be entitled to exercise the conversion privilege, the amount of insurance with respect to which he could have exercised the conversion privilege shall be paid as a claim under the group policy.

Although the thirty-one-day conversion privilege does not begin to run until termination of employment, it is apparent that PERS acknowledges that upon submission of an application for retirement a member may file an application for conversion. This brings us to the heart of the dispute in this case, namely that Patrick did not file a conversion application when he was getting his affairs in order and whether he should be excused from not having done so in the circumstances presented. From our review of the record, we conclude that had Patrick filed such an application, PERS would have recognized the conversion and paid the full death benefit to Margaret in addition to paying the pension benefits to Judith.

PERS rested its determination on its regulation, which was approved by this court in NJEA. The regulation provides in relevant part:

(a) For purposes of [N.J.S.A. 43:15A-50], the person designated as the beneficiary of an optional settlement on the retirement application may request that a retirement become effective and that a selection of an optional settlement be made as authorized by the law. If there is no designated beneficiary for an optional settlement, the person designated as the beneficiary to receive the return of contributions or unpaid benefits due to a retiree at the date of death may make this request. If a beneficiary requests that an optional settlement be made, the death benefits payable on behalf of the member shall be the death benefits payable on behalf of a member who dies after retirement as otherwise provided in the Public Employees' Retirement System Act, N.J.S.A. 43:15A-1 through 141 as amended and supplemented.

(b) Where a beneficiary of a member requests that a retirement take effect and that a selection of an optional settlement be made as authorized under [N.J.S.A. 43:15A-50], an additional amount of insurance, not to exceed the amount of insurance that could be converted under the group policies for noncontributory and contributory death benefits, shall be paid as claims under the group policies only if the member files an application for conversion of the insurance upon retirement as provided under N.J.S.A. 43:15A-93 and pays the initial premium for the converted insurance. [N.J.A.C. 17:2-3.13 (emphasis added).]

Thus, the statutory and regulatory scheme is such that if a member files a retirement application and dies between that time and thirty days after the date of retirement or Board approval, whichever is later, the member's retirement beneficiary has a choice, pursuant to what is commonly referred to as Chapter 221, to deem the member to have died while in active or retired status. N.J.S.A. 43:15A-50. The choice will obviously be different for different surviving beneficiaries, depending upon their age, state of health, amount of benefits under either option, and the like. That choice has the consequence of determining the amount of the applicable death benefit. If the member is deemed to have died in active service, the full benefit is paid, and if he or she is deemed to have died in retired status, the reduced benefit is paid. The apparent automatic conversion feature contained in N.J.S.A. 43:15A-93 for a member who dies during the thirty-one-day conversion period (after the effective date of the retirement) is not triggered if retired status is chosen under Chapter 221. NJEA, supra, 327 N.J. Super. at 413-14. As we stated there, to hold otherwise "would give benefits to a limited class of beneficiaries which exceed the benefits that a retiring member could receive, absent an election to purchase additional insurance." Id. at 414 (emphasis added). If the conversion privilege is exercised by the filing of a conversion application during the member's lifetime, the full death benefit is payable. This is not inconsistent with the NJEA holding, and it conforms with N.J.A.C. 17:2-3.13(b).

Applying these principles, we consider the arguments raised on appeal.

III.

We first address Margaret's argument that because of the timing of Patrick's death, the plain language of N.J.S.A. 43:15A-93 triggered an automatic conversion of the group policy to an individual policy. She argues that NJEA was incorrectly decided and we should not follow it, or, alternatively, that the NJEA holding is inapplicable in a split beneficiary situation such as this. We reject these arguments.

First of all, the plain language of N.J.S.A. 43:15A-93 renders the automatic conversion feature applicable only if the member dies during the thirty-one-day period following termination of employment. That did not occur here.

In NJEA, supra, 327 N.J. Super. at 413, we upheld as valid the Division's interpretation, as embodied in N.J.A.C. 17:2-3.13, that "the amendment of N.J.S.A. 43:15A-50 intended to continue the practice of allowing certain beneficiaries to choose either an active member insurance death benefit or a retirement allowance." We construed the provision in subsection (a) of the regulation and concluded that the choice made by the retirement beneficiary dictates whether the member is deemed to have died while on active or retired status, which, in turn, controls disposition of benefits.

We did not deal with subsection (b) of the regulation, which pertains to the conversion privilege. That subsection contemplates payment of the full death benefit if a conversion application has been filed (as opposed to relying upon the apparent automatic conversion feature) even though the retirement beneficiary chooses under Chapter 221 that the member is deemed to have died in retired status. In NJEA, we implied a like result, noting that "absent an election to purchase additional insurance," a result not contemplated in the legislative scheme would occur. NJEA, supra, 327 N.J. Super. at 414.

We decline Margaret's invitation that we disagree with the NJEA holding and read N.J.S.A. 43:15A-93 literally, as the NJEA panel refused to do. We agree with the sound reasoning expressed in NJEA, and our conclusion in this regard is bolstered by seven years of legislative inaction since the decision was rendered, which constitutes evidence that the statutory interpretation set forth in the decision comports with the Legislature's intent. See Green v. Jersey City Bd. of Educ., 177 N.J. 434, 445-46 (2003).

Nor do we find persuasive Margaret's argument that the NJEA holding should not apply in a split beneficiary situation such as this. There is no statutory authorization for a life insurance beneficiary to choose between active and retired status if a member dies after a retirement application is filed. That authorization belongs exclusively to the retirement beneficiary. N.J.S.A. 43:15A-50. Thus, the statutory scheme, as we interpreted it in NJEA, delegates the choice in circumstances such as these to the retirement beneficiary. Once that person chooses, the life insurance beneficiary (whether the same person or someone else) is bound by the choice. To hold that a life insurance beneficiary has a say in the matter would be without statutory authorization and would likely result in stalemates between the beneficiaries, with no mechanism for resolving the issue. The resolution proposed by Margaret, splitting the benefits so that each receives the maximum allowable, the one as though the member died in active service and the other as though the member died in retired status, where no conversion application was filed by the member, is inconsistent with the statutory scheme as interpreted in NJEA.

The legislative history underlying our rationale in NJEA relied heavily upon the fiscal impact statement issued by the Office of Legislative Services. That history applies with equal force to split beneficiaries. Unless the member chose to exercise his or her conversion right prior to death and took the steps necessary to accomplish it, the conversion privilege terminates upon death. Regardless of the identity of the beneficiaries in each category, the legislative scheme is to prohibit the recovery of both maximum benefits, "absent an election [by the member during his or her lifetime] to purchase additional insurance." NJEA, supra, 327 N.J. Super. at 414. Thus, we are satisfied that N.J.A.C. 17:2-3.13(b) embodies a natural corollary of the NJEA holding.

Margaret also argues that when a member is incapacitated by a combination of physical and emotional burdens that reasonably prevent the member from exercising the conversion right, the time for conversion will be tolled until the member regains capacity, see Bumbaco v. Bd. of Trs., PERS, 325 N.J. Super. 90 (App. Div. 1999), certif. denied, 163 N.J. 75 (2000), and that if the member dies without having regained capacity, the insurance would ultimately become payable under the automatic conversion feature of N.J.S.A. 43:15A-93. We find this argument unpersuasive. No allegation has been made, either in the administrative proceedings or before us, that Patrick's failure to file a conversion application was occasioned by mental incapacity on his part. The asserted cause was misinformation provided by Division and Department of Agriculture employees. The alleged misinformation was provided to family members actively seeking information on Patrick's behalf. Indeed, with the assistance of family members and the retention of legal counsel for preparation of a will, Patrick actively engaged in gathering that information and preparing an estate plan. In the circumstances presented here, we find no basis to excuse Patrick's filing of a conversion application based upon incapacity.

IV.

We turn next to Margaret's contention that, at the very least, an evidentiary hearing was required to resolve factual disputes. She argues that the confused and misleading information provided to various family members justified the reopening of the distribution of Patrick's retirement benefits. The Board argues that its determination was strictly a matter of law and that it assumed, for purposes of its analysis and decision, that Margaret's factual contentions were true.

"It is clear that the Board may reconsider and open a pensioner's request to review her retirement selection upon a showing of good cause." Outland v. Bd. of Trs. of TPAF, 326 N.J. Super. 395, 400-01 (App. Div. 1999). We there held that because the appellant was not presented with information concerning the consequences of her retirement selection she could not make an informed choice. Id. at 406. Specifically, the "application did not contain information indicating a possible waiver against filing an application for an accidental disability pension at a later date." Id. at 405. We concluded that "the good cause standard should be 'sufficiently flexible to accommodate the legislative purpose of affording public employees the right to make informed choices among the statutorily-authorized retirement options.'" Id. at 406 (quoting Steinmann v. State, Dep't of Treasury, Div. of Pensions, TPAF, 116 N.J. 564, 576-77 (1989)).

In Steinmann, supra, 116 N.J. at 576, the Court reversed and remanded the matter finding that the record demonstrated "good cause" to permit the appellant to change her pension designation. In finding good cause, the Court noted that "[i]t was the Board's regulation, combined with its failure to provide [the appellant] with information material to her decision, that prevented [her] from selecting her retirement option with adequate knowledge of the relevant facts." Ibid. The Court concluded that the inability to make an informed decision was sufficient to support a finding of good cause. Id. at 576-77.

The family members acknowledge receiving a conversion application before Patrick's death, and they acknowledge that the Prudential representative advised that the conversion should be exercised. However, they also say they were expressly told otherwise by representatives of the Division and the Department of Agriculture, and that the Prudential representative told them that if they converted the life insurance, "the family could receive the benefits of both the group and the newly converted life insurance policy." Further, even after the controversy arose, they insist that the Division representative, Joanne Martin, initially reiterated that the incorrect information she had previously given was correct, namely that both the full life insurance and pension benefits were payable. The record before the Board includes an undated and unsigned memo from Joanne Martin, outlining her version of what she told family members, which the Board referred to in its "findings of fact." And, as Judith noted in her letter to the Division, "[w]e would have purchased the Full Group Life insurance if given the correct information."

Contrary to the Board's assertion that it accepted as true Margaret's factual contentions, its findings of fact are limited to those supporting its decision and to the exclusion of those asserted by family members. Arguably material facts are in dispute as to information provided by employees of the Division and the Department of Agriculture to family members inquiring on Patrick's behalf for the purpose of getting his affairs in order and preparing an estate plan. It is apparent that the estate plan that was developed, as embodied in the will Patrick signed the day before his death, contemplated receipt of the full life insurance benefit, which he expressly directed should be used to pay off the outstanding mortgage balances that approached that amount, and that his widow would enjoy a monthly stipend for the remainder of her life on which to live.

In its appellate brief, the Board states:

In all probability, the advice given to Patrick's son was based on his beneficiary designations then in effect. At worst, Margaret's brother was given inaccurate advice at a time when the true state of the law regarding option selections and conversions was readily available. The record does not indicate what Thomas King told Patrick Mullen, if anything; nor can there be anything but speculation as to what Thomas was told by any individual.

In our view, whether a family member of a dying employee is provided "inaccurate advice" contrary to "the true state of the law" about benefits is very significant. These matters are complicated for lawyers and judges, and certainly for lay persons. If material misinformation was provided, it cannot be brushed aside lightly. PERS members and their families should expect accurate and reliable information from the experts who administer our pension system. The choices they make are guided by the information they receive from these officials. And, it must constantly be remembered and reinforced that pension laws are remedial in nature and "should be liberally construed and administered in favor of the persons intended to be benefited thereby." Steinmann, supra, 116 N.J. at 572 (quoting Geller v. Dep't of Treasury, 53 N.J. 591, 597-98 (1969)).

Further, it is reasonably inferable that Patrick believed both benefits were payable, as did his family and attorney, in preparing a will that contemplated both. And, the record does contain more than speculation, namely statements provided in the administrative proceedings by family members and considered by the Board, very specifically stating what they were told by specific individuals. The Board chose to disregard those statements and refused to treat this as a contested case requiring an OAL hearing.

Whether the family members misunderstood or misinterpreted information that was accurately provided by State officials or whether misinformation was provided can only be resolved upon a full hearing. Thus, good cause has been established for reconsideration of the matter. With a full factual record developed, the appropriate legal consequences will follow. See, e.g., id. at 577-78 (appellant entitled to change her pension designation based upon finding that she was misinformed by Board); Durvin v. State, Dep't of Treasury, 76 N.J. 203, 207 (1978) (matter remanded to Board based on the inherent power of an administrative agency to reopen, modify or rehear orders previously entered); Outland, supra, 326 N.J. Super. at 406 (matter remanded to Board to accept appellant's application for a disability pension because Board failed to provide appellant with adequate information).

The final decision of the Board is reversed and the matter is remanded for further proceedings consistent with this opinion. We do not retain jurisdiction.


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