NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-4327-17T4

IN RE ADOPTION OF N.J.A.C.

17:2-3.8 AND 17:2-3.13.

_____________________________

Argued January 7, 2019 – Decided February 21, 2019

Before Judges Messano, Fasciale and Gooden Brown.

On appeal from the New Jersey Department of the 

Treasury, Division of Pensions and Benefits.

Richard A. Friedman argued the cause for appellant 

New Jersey Education Association (Zazzali, Fagella, 

Nowak, Kleinbaum & Friedman, attorneys; Richard A. 

Friedman, of counsel and on the brief; Kaitlyn E. 

Dunphy, on the briefs).

Amy Chung, Deputy Attorney General, argued the 

cause for respondent Board of Trustees, Public 

Employees' Retirement System (Gurbir S. Grewal, 

Attorney General, attorney; Melissa H. Raksa, 

Assistant Attorney General, of counsel; Amy Chung, 

on the brief).

The opinion of the court was delivered by

FASCIALE, J.A.D.

This appeal focuses on two amended regulations (the two regulations) 

promulgated by the Board of Trustees (the Board), Public Employees' 

APPROVED FOR PUBLICATION

February 21, 2019

APPELLATE DIVISION
A-4327-17T4 2

Retirement System (PERS): N.J.A.C. 17:2-3.8(b) (implementing N.J.S.A. 

43:15A-93 by clarifying the effective date for converted individual insurance 

policies); and N.J.A.C. 17:2-3.13 (implementing N.J.S.A. 43:15A-50 by 

addressing benefits payable when a member dies with a retirement application 

pending). The category of PERS members primarily affected by this appeal 

are those who exercised a "conversion privilege," died while their retirement 

applications were pending, and whose beneficiaries chose "retired" benefits, 

not "active" benefits. The New Jersey Education Association (NJEA) argues 

that the two regulations conflict with the enabling statutes they purport to 

implement, and that the Board therefore exceeded its statutory authority and 

acted arbitrarily.1 

The two regulations maintain the longstanding practice that beneficiaries 

of PERS members may generally receive a "retired" benefit (from the 

member's retirement allowance) or an "active" benefit (from the member's life 

 

1

 The Department of the Treasury, Division of Pension and Benefits 

(Division), administers New Jersey's public retirement systems, including 

PERS. In general, the Division's regulations govern the administration of the 

State retirement systems. N.J.A.C. 17:1. The Division also promulgates PERS 

regulations under N.J.A.C. 17:2. Although the Division administers PERS, it 

is the Board that has "general responsibility for the proper operation of 

[PERS]" and must "annually establish rules and regulations for the 

administration and transaction of the [B]oard's and committees' business." 

N.J.S.A. 43:15A-17(a)(1). Therefore, NJEA's appeal is from the Board's 

amendments to the two regulations. 
A-4327-17T4 3

insurance), but not both. For years, PERS members have had the right to 

convert a group insurance policy to an individual policy. This "conversion 

privilege" allows members who terminate employment to maintain adequate 

life insurance. 

This appeal requires us to decide two underlying issues. First, may a

beneficiary make a claim against the converted individual insurance policy 

when the member merely applied for that insurance protection and submitted a 

premium check to protect the "conversion privilege," died while a retirement 

application was pending, and whose beneficiary opted for a statutory "retired" 

benefit? Second, under the enabling statutes, is that beneficiary entitled to 

receive both the member's life insurance and retirement allowance

simultaneously? The answers to these questions inform our conclusion that the 

two regulations are valid. 

As to the first question, the answer is no. If a PERS member whose 

retirement application is pending and whose beneficiary has chosen the 

"retired" benefit exercises the "conversion privilege," and then dies during the 

statutory thirty-one-day grace period applicable to the group insurance policy, 

the beneficiary's life insurance claim is against the member's group policy. 

That is so because the converted individual insurance policy will not become 

effective until after expiration of the grace period for the group policy. By 
A-4327-17T4 4

statute, "the amount of life insurance which [a beneficiary] would have been 

entitled to . . . 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" during the grace period. 

N.J.S.A. 17B:27-72(k). 

The answer to the second question is also no. Generally, a beneficiary 

cannot receive the member's retirement allowance in addition to the death 

benefit, which of course has been the law for years. But payment on a life 

insurance claim for a member on "active" status, in accordance with 

longstanding precedent, entitles the beneficiary to reimbursement of the 

member's pension contributions plus interest on those contributions. 

Applying the presumption of validity and reasonableness ordinarily 

accorded to administrative regulations, and giving the Board wide latitude to 

achieve its legislatively assigned tasks, we hold that the two regulations – both 

effective in January 2018 – comport with the overall framework, objectives, 

and terms of the enabling statutes and established precedent. Any other result 

would require that we re-write the legislative framework of the enabling 

statutes and ignore precedent, which we will not do. We therefore decline to 

invalidate the two regulations, and affirm.
A-4327-17T4 5

I.

A familiar standard of review guides our analysis. "Administrative 

regulations are entitled to a presumption of validity and reasonableness." In re 

Adoption of N.J.A.C. 17:1-6.4, 454 N.J. Super. 386, 395 (App. Div. 2018). 

The burden of overcoming that presumption is on the party challenging the 

agency action. Ibid. Here, NJEA has the burden. 

Overturning an administrative determination occurs only if it was 

"arbitrary, capricious, unreasonable or violated express or implied legislative 

policies." Ibid. "Administrative agencies have wide discretion to decide how 

best to approach legislatively assigned administrative tasks." Ibid. We 

liberally construe "the grant of authority to an administrative agency . . . to 

enable the agency to accomplish its statutory responsibilities." Ibid. 

Consequently, we "readily imply such incidental powers as are necessary to 

effectuate fully the legislative intent." Ibid. Administrative regulations must 

nevertheless be "within the fair contemplation of the delegation of the enabling 

statute." Ibid. The substantial deference we ordinarily apply to an agency

regulation is available if it is "consistent with the governing statutes' terms and 

objectives." Ibid.

In determining whether an agency possessed the requisite authority to 

issue a regulation, courts strive "to determine the intent of the Legislature." 
A-4327-17T4 6

Id. at 396. To that end, we begin with the statutory language, which is the best 

indicator of legislative intent. DiProspero v. Penn, 183 N.J. 477, 492 (2005). 

Although we will analyze the text of two enabling statutes (N.J.S.A. 43:15A93 and N.J.S.A. 43:15A-50), we perform that analysis by considering the 

entire enabling legislation. Ibid. That is, we look beyond the specific terms of 

the enabling act to the statutory policy by examining the entire legislation in 

light of its surroundings and objectives. Ibid. We defer to the interpretation of 

legislation by the administrative agency to whom its enforcement is entrusted, 

but only if that interpretation "is not plainly unreasonable." Matturri v. Bd. of 

Trs. of the Judicial Ret. Sys., 173 N.J. 368, 382 (2002).

II.

With those standards in mind, we begin by summarizing the pertinent 

legal principles. Our summary focuses on two distinct benefits: (1) a lump 

sum payment to a beneficiary upon death of a member; and (2) a retirement 

allowance to a member or that member's beneficiary. Our summary bolsters 

the conclusion that a converted life insurance policy becomes effective when 

the group policy expires at the end of the thirty-one-day grace period. And the 

summary applies well-grounded precedent that beneficiaries of PERS members 

may receive a "retired" benefit or an "active" benefit, but not both, regardless 

of the effective date for a converted individual insurance policy. 
A-4327-17T4 7

As to the first benefit, PERS members are entitled to life insurance while 

actively employed. We commonly call this a death benefit. Beneficiaries of 

PERS members generally receive life insurance benefits under a member's 

group life insurance policy (the group life policy) issued by the Prudential 

Insurance Company (Prudential), which provides a lump sum payment in the 

event of death. N.J.S.A. 43:15A-41(c); N.J.S.A. 43:15A-88. The group life 

policy remains in effect for thirty-one days after a member's employment 

ceases. Indeed, the group life policy must "contain a provision that the 

policyholder is entitled to a grace period of [thirty-one] days." N.J.S.A. 

17B:27-72(b). Before retirement, the death benefit is generally one-and-onehalf times the final salary of the PERS member. N.J.S.A. 43:15A-41(c). 

Thereafter, the amount of the death benefit decreases.

2

 

 

2

 The decrease is authorized pursuant to N.J.S.A. 43:15A-48(c) – entitled 

"Retirement allowance for service" – which states: 

Upon the receipt of proper proofs of the death of a 

member who has retired on a service retirement 

allowance, there shall be paid to the member's 

beneficiary, an amount equal to 3/16 of the 

compensation upon which contributions by the 

member to the annuity savings fund were based in the 

last year of creditable service.

The decrease is dependent on satisfying the terms of this statute.
A-4327-17T4 8

Recognizing that the amount of the death benefit will decrease, the 

Legislature passed a law that allowed members to maintain adequate life 

insurance. Under N.J.S.A. 43:15A-93, members receive a "conversion 

privilege," which allows them to convert their group life policy to an 

individual insurance policy (the individual policy). If a member wishes to 

exercise this conversion privilege, the member must do so during the thirtyone day grace period. 

Therefore, exercising the conversion right allows for adequate life 

insurance at the end of the grace period. N.J.S.A. 43:15A-93 provides in 

pertinent part:

Any such group policy or policies shall include, with 

respect to any insurance terminating or reducing 

because the member ceases to be eligible for 

participation under the [PERS] or 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; and shall also include, with respect to 

insurance terminating because of termination of the 

group policy resulting from a termination of the death 

benefits for all members established under . . . 

[N.J.S.A.] 43:15A-38, 43:15A-41, 43:15A-45, 

43:15A-46, 43:15A-48, 43:15A-49, 43:15A-57, the 

conversion privilege available upon termination of the 

group policy as prescribed by the law relating to group 

life insurance. Any such group policy or policies shall 

also provide that if a member dies during the [thirtyone]-day period during which he would be entitled to 

exercise the conversion privilege, the amount of 

insurance with respect to which he could have 
A-4327-17T4 9

exercised the conversion privilege shall be paid as a 

claim under the group policy. When benefits payable

upon the death of a member following retirement are 

determined as though the member had not retired, the 

death benefits payable under the group policy, 

together with the amount of insurance paid under any 

individual policy obtained under the conversion 

privilege, shall in no event exceed the amount of 

insurance for which the member was insured under the 

group policy immediately prior to the date the right of 

conversion arose.

[(Emphasis added).]

N.J.S.A. 43:15A-93 explicitly addresses two categories of PERS 

members who cease employment. First, those individuals who do not exercise 

the "conversion privilege" and who die during the thirty-one-day grace period. 

For this first category, "the amount of insurance . . . shall be paid as a claim 

under the group policy." Ibid. And second, those who exercise a "conversion 

privilege" and die while their retirement application is pending and whose 

beneficiaries choose "active" benefits. For this second category, the amount of 

death benefits payable "shall in no event exceed the amount of insurance for 

which the member was insured under the group policy immediately prior to the

date the right of conversion arose." Ibid. A PERS member in "active" status 

at the time of death receives no monthly retirement allowance, although the 

beneficiary receives a return of the member's pension contributions plus 

interest on those contributions.
A-4327-17T4 10

N.J.S.A. 43:15A-93 does not explicitly address a third category of 

beneficiaries primarily affected by this opinion, that is, those beneficiaries who 

chose "retired" benefits – when the member had exercised a "conversion 

privilege" and died while the member's retirement application was pending. 

To clarify the effective date of the individual policy converted from a group 

insurance policy, the Board amended N.J.A.C. 17:2-3.8(b), which now 

provides: 

If a member is covered by group life insurance during 

employment, the coverage shall cease [thirty-one]

days subsequent to the member's termination date 

from employment, regardless of the cause of 

termination. A member may convert the life insurance 

at the member's expense as set forth in N.J.S.A.

43:15A-93. The converted individual policy will not 

take effect until the expiration of the group life 

insurance policy at the conclusion of the [thirty-one]-

day grace period.

[(Emphasis added).]

The effective date for the individual policy for this third category of 

beneficiaries, however, is the same as the other two categories of beneficiaries 

explicitly addressed by N.J.S.A. 43:15A-93. N.J.S.A. 17B:27-72(k) provides 

the statutory support for that conclusion, which states in pertinent part that

[t]he [group] 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 . . . 

and before the individual policy shall have become 
A-4327-17T4 11

effective, 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. 

[(Emphasis added).]

As to the second benefit, which is a retirement allowance, retired PERS 

members are entitled to receive a periodic allowance, or what is commonly 

called a pension. Under this benefit, the enabling statute (N.J.S.A. 43:15A-50) 

governs multiple options available to PERS members. N.J.S.A. 43:15A-50, 

which does not include a "conversion privilege" for PERS members, provides:

At the time of retirement, a member shall receive 

benefits in a retirement allowance payable throughout 

life, or the member may, on retirement, elect to 

receive the actuarial equivalent of the member's 

retirement allowance, in a lesser retirement allowance 

payable throughout life, with the provision that:

Option 1. If the member dies before the member has 

received in payments the present value of the 

retirement allowance as it was at the time of 

retirement, the balance shall be paid to a legal 

representative or to such person as the member shall 

nominate by written designation acknowledged and 

filed with the retirement system, either in a lump sum 

or by equal payments over a period of years at the 

option of the payee. If the member shall have 

designated a natural person as the payee, said payee 

may elect to receive such payments in the form of a 

life annuity.
A-4327-17T4 12

Option 2. Upon the member's death, the member's 

retirement allowance shall be continued throughout 

the life of and paid to such person[,] as the member 

shall nominate by written designation duly 

acknowledged and filed with the retirement system at 

the time of retirement.

Option 3. Upon the member's death, one-half of the 

member's retirement allowance shall be continued 

throughout the life of and paid to such person[,] as the 

member shall nominate by written designation duly 

acknowledged and filed with the retirement system at 

the time of retirement.

Option 4. Some other benefit or benefits shall be paid 

either to the member or to whomever the member 

nominates, if such other benefit or benefits, together 

with the lesser retirement allowance, shall be certified 

by the actuary to be of equivalent actuarial value. In 

no case, however, shall the lesser retirement allowance 

be smaller than that provided under Option 2.

Option 5. Some other benefit, which is equivalent to 

the full amount, three-quarters, one-half or one-quarter 

of the member's retirement allowance, shall be paid to 

whomever the member nominates and if that nominee 

dies before the member, the member's retirement 

allowance shall increase to the maximum retirement 

allowance for the member's lifetime, provided that 

such other benefit together with the member's lesser 

and maximum retirement allowances shall be certified 

by the actuary to be of equivalent actuarial value.

If the total amount of benefits paid to a retirant who 

does not elect to receive benefits in the form of an 

optional settlement, or to the retirant and the 

designated beneficiary in the case of a retirant who 

does so elect, before the death of the retirant or the 

retirant and the beneficiary is less than the deductions 

accumulated in the retirant's account at the time of 
A-4327-17T4 13

retirement, including regular interest, the balance shall 

be paid in one lump sum to the retirant's designated 

beneficiary or estate in the manner provided . . . 

[N.J.S.A.] 43:15A-51.

 

Importantly, N.J.S.A. 43:15A-50 addresses under what circumstances a 

member's retirement allowance becomes effective if the member dies within 

thirty days "after the date of retirement or the date of [B]oard approval, 

whichever is later." 

Except in the case of members who have elected to 

receive (1) a deferred retirement allowance pursuant to 

. . . [N.J.S.A.] 43:15A-38 or (2) early retirement 

allowances pursuant to subsection b. of . . . [N.J.S.A.] 

43:15A-41 after separation from service . . . if a 

member dies within [thirty] days after the date of 

retirement or the date of [B]oard approval, whichever 

is later, the member's retirement allowance shall not 

become effective and the member shall be considered

an active member at the time of death. However, if 

the member dies after the date the application for 

retirement was filed with the system, the retirement 

will become effective if:

. . . . 

c. The deceased member had designated a beneficiary 

under an optional settlement provided by this section; 

and

d. The surviving beneficiary requests in writing that 

the [B]oard make such a selection. Upon formal 

action by the [B]oard approving that request, the 

request shall be irrevocable.

The [B]oard may select an Option 3 settlement, on 

behalf of the beneficiary of a member who applied for 
A-4327-17T4 14

and was eligible for retirement but who died prior to 

the effective date of the retirement allowance, if all of 

the above conditions, with the exception of c., are met.

[Ibid.]

Subsection (d) is the exception to the general rule of N.J.S.A. 43:15A-50 that 

the member is treated as an "active" member at death if the member does not 

live at least thirty days past the effective retirement date or approval date, 

whichever is later. Under the exception, the beneficiary chooses either

"active" or "retired" benefits, but not both.

To eliminate any ambiguity as to the rights enjoyed under N.J.S.A. 

43:15A-50 during the thirty-day period, and applying the effect of the overall 

statutory framework, objectives, and terms – that a beneficiary may obtain 

either an "active" or "retired" benefit – the Board amended N.J.A.C. 17:2-3.13, 

entitled "Benefits payable when a member dies with a retirement application 

pending," which provides:

Pursuant to N.J.S.A. 43:15A-50 and 43:15A-50.1, the 

person designated as the beneficiary of an optional 

settlement on the retirement application may request, 

upon the member's death, 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 
A-4327-17T4 15

member shall be the death benefits payable on behalf 

of a member who dies after retirement as otherwise 

provided in the [PERS] Act, N.J.S.A. 43:15A-1 

through 141 as amended and supplemented.

In amending the two regulations, the Board explained that the statutory scheme 

and legal precedent support the notion that "when a member dies with a 

retirement application pending, the member's beneficiary (or beneficiaries) is 

entitled to receive active group life insurance benefits or retired pension 

benefits, but not both." 49 N.J.R. 2189(a) (July 17, 2017). 

III.

On appeal, NJEA argues that we should invalidate the two regulations as 

ultra vires. NJEA conflates two general contentions. First, according to 

NJEA, when a member has exercised a "conversion privilege" and has died 

during the grace period, that member's beneficiary – who has chosen a 

"retired" benefit – gets both pension and life insurance benefits. NJEA relies 

on New Jersey Education Association v. Board of Trustees, Public Employees' 

Retirement System, 327 N.J. Super. 405 (App. Div. 2000) (NJEA v. PERS)

and N.J.S.A. 43:15A-50 for that proposition. Second, NJEA contends – as to 

the death benefit for such a beneficiary – that the life insurance claim is under 

the individual policy, not the group policy. NJEA says that is so primarily 

because the member "elected to and purchased an individual life insurance 

policy [by submitting the first premium check]." 
A-4327-17T4 16

A.

Setting aside for the moment NJEA's first contention that such a 

beneficiary is entitled to receive life insurance and pension benefits 

simultaneously, its argument that the beneficiary can make a claim against the 

individual policy begs the question of when the individual policy becomes 

effective. NJEA initially maintained in its merits brief that once a member 

applies for an individual policy – by exercising the conversion privilege – and 

makes a premium payment, the individual policy becomes effective. But 

NJEA then contended in its reply brief that the effective date of the converted 

policy is "a red herring" and "irrelevant." And for good reason.

The statutory scheme contemplates beneficiaries (who sought "retired" 

benefits) filing claims against the group policy for members who die within

thirty-one days during which those members may exercise a "conversion 

privilege." According to the plain text of N.J.S.A. 17B:27-72(k), "the amount 

of life insurance which [a beneficiary] would have been entitled to . . . 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." We cannot alter this text. Only the 

Legislature can do that. Of course, a member is free to obtain additional life 

insurance – beyond the coverage available during the grace period before the 
A-4327-17T4 17

effective date of the individual insurance policy – if that member wishes to do 

so.

The Board's action in promulgating the two regulations comports with 

the enabling statutes' terms and objectives. The October 2014 version of the 

Division's Conversion of Group Life Insurance Fact Sheet #13 explicitly stated 

that "[t]he individual policy will be effective at the end of the [thirty-one] day 

conversion grace period." The July 2016 version of Fact Sheet #13 states that 

the individual policy becomes effective at the end of the "[thirty-one] day 

conversion grace period." It states further that "[i]f you do not convert to an 

individual policy by the end of the [thirty-one] day period, or if you have 

applied for an individual policy and your death occurs within this [thirty-one] 

day period, group coverage will end and the policy will not be eligible for 

conversion." And the April 2018 version of Fact Sheet #13 continues the 

practice of members protecting their "conversion privilege" by applying for 

conversion to Prudential, with at least one month's premium, when that 

member files for retirement. It additionally states, "[w]hile sending the 

application and premium to Prudential will protect your conversion privilege, 

under no circumstances can the conversion policy become effective until 

[thirty-one] days after you cease employment." 
A-4327-17T4 18

Although not determinative, N.J.A.C. 17:2-3.8(b) comports with 

Prudential's brochure, which states that a member's "conversion policy will be 

effective on the [thirty-second] calendar day after your group life insurance

coverage ended," and "[i]f you die within [thirty-one] calendar days [during 

which you are] entitled to conversion, then a life insurance claim will be 

processed under the group contract." 50 N.J.R. 646(a) (Jan. 16, 2018). Along 

those lines, the Board remarked that conversion policies "do not become 

effective until the member's active group life insurance policy expires, since 

the purpose of a group life insurance conversion privilege is to allow someone 

who is terminating employment for any reason to continue to have the same 

level of insurance coverage as while actively employed." Ibid. The Board

explained that 

a member's active group life insurance continues for 

[thirty-one] days after the date of termination of 

employment for any reason . . . . Because the member 

is still covered by his or her active group life 

insurance policy during this [thirty-one]-day period, 

the member cannot also be covered by a retired and/or 

converted group life insurance policy.

[Ibid.]

There is ample legal support for these assertions.

 
A-4327-17T4 19

B.

That leaves NJEA's remaining argument, that a beneficiary who has 

chosen a "retired" benefit is simultaneously entitled to that benefit (a pension)

and an "active" benefit (or death benefit) when the member exercised a 

"conversion privilege" and died during the grace period. For this contention, 

NJEA relies on NJEA v. PERS and N.J.S.A. 43:15A-50, neither of which lead 

to that conclusion. In NJEA v. PERS, after considering N.J.S.A. 43:15A-50, 

N.J.S.A. 43:15A-93, and the overall legislative scheme, we did not conclude or 

suggest that the beneficiary gets the pension benefit and the life insurance 

benefit. 

In NJEA v. PERS, we declined to invalidate N.J.A.C. 17:2-3.13 –

effective in 1998 – which clarified that certain beneficiaries of deceased PERS

members must elect to receive a retirement allowance or collect a full 

insurance benefit, but not both. 327 N.J. Super. at 407. We rejected NJEA's 

argument that the regulation conflicted with N.J.S.A. 43:15A-50 and N.J.S.A. 

43:15A-93. Id. at 407-10. In rejecting that contention, and after outlining the 

statutory framework, and considering the legislative history of N.J.S.A. 

43:15A-50, we concluded that N.J.S.A. 43:15A-50 – contrary to NJEA's

argument on this appeal – continued the practice of 

allowing certain beneficiaries to choose either an 

active member insurance death benefit or a retirement 
A-4327-17T4 20

allowance. In particular, in discussing the retroactive 

portion of the bill, the [Office of Legislative Services] 

noted that if a beneficiary had previously received the 

death-in-service life insurance death benefit but now 

wanted the retirement benefit, the beneficiary would 

have to return to PERS a substantial portion of the life 

insurance death benefit. Surely, there would be no 

need to consider the return of the life insurance death 

benefit if the beneficiary was to be given both the 

death benefit and the retirement benefit.

Consequently, we do not accept NJEA's literal 

interpretation of the relevant statutes. Such an

interpretation 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 413-14 (emphasis added).]

In its merits brief, NJEA states we "suggested" by the phrase "absent an 

election to purchase additional insurance" that our reference to "additional 

insurance" means the converted individual policy. If that were the case –

NJEA maintains – then a beneficiary would be entitled to both benefits. If we 

meant to say in that caveat that "additional insurance" was the converted 

individual policy, then we would have said so. Rather, a retiree who purchases 

additional insurance would always be entitled to that protection. But we never 

suggested that a beneficiary can get the active member's insurance death 

benefit and the retirement allowance simultaneously. Our conclusion at that 

time – and now – comports with the overall framework, objectives, and terms 
A-4327-17T4 21

of the enabling statutes, particularly as reflected by the legislative history of 

N.J.S.A. 43:15A-50. 

We also note that before January 2018 – the effective date for the two 

regulations – N.J.S.A. 17:2-3.8(b) and N.J.A.C. 7:2-3.13(b) had addressed 

converted individual policies. In neither of the prior versions of these 

regulations is there credible support for affording simultaneous "retired" and 

"active" benefits to beneficiaries. Again, the two regulations specifically 

addressed the effective date for converted individual insurance policies in 

accordance with N.J.S.A. 43:15A-93, and benefits payable when a member 

dies with a retirement application pending in accordance with N.J.S.A. 

43:15A-50. 

N.J.A.C. 17:2-3.8(b) had previously provided merely that "[i]f a member 

is covered by group life insurance during employment, the coverage shall 

cease [thirty-one] days subsequent to the member's termination date from 

employment, regardless of the cause of termination. A member may convert 

the life insurance at the member's expense as set forth in N.J.A.C. 7:2-

3.13(b)." 49 N.J.R. 2189(a). In other words, the regulation provided the same

rights afforded by a plain reading of N.J.S.A. 43:15A-93. The amended 

regulation simply clarified – as part of the overall legislative scheme and 

precedent – the effective date for the individual policy. 
A-4327-17T4 22

And N.J.A.C. 7:2-3.13(b) had previously provided: 

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. The premiums paid for the 

converted insurance shall be retained by the carrier 

and be applied to the premiums payable by the State 

and the retirement system for benefits provided under 

the group policies. 

[49 N.J.R. 2189(a).]

The Board amended this regulation because it was "subject to misinterpretation 

that contradict[ed] the intent of current statutes legislating the administration 

of beneficiary benefits in cases where a member dies with a retirement 

application pending." Ibid. 

The Board further noted "[e]xisting case law supports that when a 

member dies with a retirement application pending, the member's beneficiary 

(or beneficiaries) is entitled to receive active group life insurance benefits or 

retired pension benefits, but not both." Ibid. In adopting the two regulations, 

the Board correctly explained – consistent with NJEA v. PERS – that the 

Legislature's "intent [was] not to allow a member's beneficiaries to 
A-4327-17T4 23

[simultaneously] receive both [active death and retired death] benefits." 50 

N.J.R. 646(a). 

For all of these reasons, we reject NJEA's ultra vires argument. "Ultra 

vires" acts are acts that are "void and may not be ratified." Port Liberte II 

Condo. Ass'n v. New Liberty Residential Urban Renewal Co., 435 N.J. Super. 

51, 65 (App. Div. 2014) (quoting Grimes v. City of East Orange, 288 N.J. 

Super. 275, 279 (App. Div. 1996)). "While findings of ultra vires actions are 

disfavored, '[o]ur role is to enforce the will of the Legislature' because 

'[s]tatutes cannot be amended by administrative fiat.'" In re Agric., 

Aquacultural, & Horticultural Water Usage Certification Rules, 410 N.J. 

Super. 209, 223 (App. Div. 2009) (alterations in original) (citations omitted). 

We are satisfied that the Board's interpretation of N.J.S.A. 43:15A-50 and 

N.J.S.A. 43:15A-93 is the correct one. Giving the Board's interpretation the 

presumption of validity, we conclude that N.J.A.C. 17:2-3.8(b) and N.J.A.C. 

17:2-3.13 are valid. 

Affirmed.