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Minsavage v. Board of Trustees

Supreme Court of New Jersey

October 24, 2019

Christine Minsavage for David Minsavage (deceased), Petitioner-Appellant,
Board of Trustees, Teachers' Pension and Annuity Fund, Respondent-Respondent.

          Argued September 9, 2019

          On certification to the Superior Court, Appellate Division.

          John C. Kelly argued the cause for appellant (McCarter & English, attorneys; John C. Kelly, of counsel and on the briefs).

          Amy Chung, Deputy Attorney General, argued the cause for respondent (Gurbir S. Grewal, Attorney General, attorney; Melissa H. Raksa, Assistant Attorney General, of counsel, and Christopher Meyer, Deputy Attorney General, on the brief).

         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 twenty-four years when he was diagnosed with terminal stage IV 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 twenty-five years of teaching service.

         On April 9, 2015, David passed away, having accumulated just over twenty-four years and nine months of teaching service over the course of his career. Less than two weeks after David's death, the Division of Pension and Benefits notified Christine that David's retirement application would not be approved because he had not completed twenty-five years of teaching service. As a result, 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. Christine sought to modify David's retirement application to select ordinary disability.

         The Board of Trustees of the Pension Fund (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." The Appellate Division affirmed, noting that Christine's proofs "fell short of establishing incapacitation" and that "[t]he plain language of N.J.A.C. 17:3-6.3 indicates it only applies to a retirement application the Board has already approved."

         HELD: 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 remands this matter for further proceedings to allow petitioner Christine Minsavage the opportunity to argue in favor of modification under that standard.

         1. Pension statutes should be liberally construed and administered in favor of the persons intended to be benefited thereby. For nearly seven decades the Court has maintained that the power to reopen proceedings may be invoked by administrative agencies to serve the ends of essential justice and the policy of the law. That principle applies equally to the right to amend a retirement application. That a pensioner is not a member of the Pension Fund when attempting to modify a retirement application does not on its own preclude such modification, and beneficiaries have been allowed to change the retirement application of a deceased member of the public pension systems. Additionally, 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." Steinmann v. Dep't of Treasury, 116 N.J. 564, 573 (1989); Duvin v. Bd. of Trs., PERS, 76 N.J. 203, 207 (1978). Therefore, notwithstanding N.J.A.C. 17:3-6.3(a)'s reference to the period before an allowance "becomes due and payable," an application for pension benefits may be amended whether or not pension benefits are due and payable upon the proper showing. (pp. 5-8)

         2. Here, the Board acted unreasonably by denying Christine's request to modify David's retirement application upon its stated grounds. The interests of justice and a liberal reading of the applicable pension laws require that Christine be given 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. (pp. 8-9)

         The judgment of the Appellate Division is REVERSED and the matter is REMANDED to the Board for further proceedings.


          PER ...

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