Title: Minsavage v. Board of Trustees, Teachers' Pension and Annuity Fund
Citation: N/A
Docket Number: 
State: new-jersey
Issuer: new-jersey Supreme Court
Date: October 24, 2019

Minsavage v. Board of Trustees, Teachers' Pension and Annuity Fund Annotate this Case Justia Opinion Summary 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 required twenty-five years of teaching service. David passed away in April 2015, 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. The New Jersey Supreme Court reversed, however, finding that neither membership nor prior approval of a retirement application was required for modification of a retirement selection where good cause, reasonable grounds, and reasonable diligence were shown. The Court remanded this matter for further proceedings to allow Christine the opportunity to argue in favor of modification under that standard. Read more Want to stay in the know about new opinions from the Supreme Court of New Jersey? Sign up for free summaries delivered directly to your inbox. Learn More › You already receive new opinion summaries from Supreme Court of New Jersey. Did you know we offer summary newsletters for even more practice areas and jurisdictions? Explore them here . SYLLABUSThis syllabus is not part of the Court’s opinion. It has been prepared by the Office of the Clerk for the convenience of the reader. It has been neither reviewed nor approved by the Court. In the interest of brevity, portions of an opinion may not have been summarized. Christine Minsavage v. Board of Trustees, Teachers’ Pension and Annuity Fund (A-48-18) (081507)Argued September 9, 2019 -- Decided October 24, 2019PER CURIAM 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.” 1 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.CHIEF JUSTICE RABNER and JUSTICES LaVECCHIA, ALBIN, PATTERSON, FERNANDEZ-VINA, SOLOMON, and TIMPONE join in this opinion. 2 SUPREME COURT OF NEW JERSEY A- 48 September Term 2018 081507 Christine Minsavage for David Minsavage (deceased), Petitioner-Appellant, v. Board of Trustees, Teachers’ Pension and Annuity Fund, Respondent-Respondent. On certification to the Superior Court, Appellate Division. Argued Decided September 9, 2019 October 24, 2019John 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). PER CURIAM 1 The issue in this appeal is whether a widow can modify the retirementapplication of her recently deceased husband, who was a member of theTeachers’ Pension and Annuity Fund (Pension Fund), even though hisapplication was never approved because he selected a retirement option forwhich he was ultimately ineligible. We hold that neither membership nor priorapproval of a retirement application is required for modification of aretirement selection where good cause, reasonable grounds, and reasonablediligence are shown, and we remand this matter for further proceedings toallow petitioner Christine Minsavage the opportunity to argue in favor ofmodification under that standard. I. The appellate record reveals that David and Christine Minsavage weremarried and had four children. David had served as a math teacher at HanoverPark High School for more than twenty-four years when he was diagnosedwith terminal stage IV pancreatic cancer in August 2014. In November 2014 ,following advice allegedly provided by a New Jersey Education Associationrepresentative, David selected the “early retirement” option on his retirementapplication. Early retirement eligibility requires twenty-five years of teachingservice. N.J.S.A. 18A:66-113.1. 2 David’s cancer developed rapidly, and he stopped teaching in mid-December 2014. On April 9, 2015, David passed away. Because the schoollisted his last day of teaching service as the day before he died, Davidaccumulated just over twenty-four years and nine months of teaching serviceover the course of his career. Less than two weeks after David’s death, the Division of Pension andBenefits notified Christine that David’s retirement application would not beapproved because he had not completed twenty-five years of teaching servicewhen he died; had he lived to teach until July 1, 2015, David would have beeneligible for early retirement. Had David qualified for and chosen earlyretirement, his beneficiary -- his widow Christine -- would have received$3,423.06 each month. Because David did not qualify for his retirementselection, Christine was entitled only to reimbursement of David’s pensioncontributions 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 andqualified for “ordinary disability,” rather than “early retirement,” on his 3 retirement application. 1 On June 15, 2015, Christine sought to modify David’sretirement application to select ordinary disability rather than early retirement. The Board of Trustees of the Pension Fund (the Board) deniedChristine’s request on the ground that the Pension Fund’s “administrativeregulations do not allow for retroactive disability retirement applications, andbecome effective only on or after the date of filing.” (citing N.J.A.C. 17:3-6.1(f)(5)). The Appellate Division affirmed, holding that it could not “rely on[Christine’s] hindsight to permit her to alter or amend [David’s] retirementapplication” because her proofs “fell short of establishing incapacitation” andbecause “[t]he plain language of N.J.A.C. 17:3-6.3 indicates it only applies toa retirement application the Board has already approved.” The Attorney General asks this Court to affirm the Appellate Division’sdecision, arguing on behalf of the Board that because David’s Pension Fundmembership terminated upon his death, he cannot now submit a new ormodified retirement application. The Attorney General further asserts thatbecause David’s application was never approved and thus never became dueand payable, his application cannot be modified.1 Whether David would have qualified for ordinary disability is a question this Court leaves to be resolved on remand. The record does not specify the value of entitlements his family would have received if David had selected and qualified for ordinary disability on his retirement application. 4 We reject the Attorney General’s contention that the right to reopen aretirement application for good cause never extends to those for whom benefitsnever became due and payable because they selected a retirement option forwhich they were not yet eligible. Neither membership nor prior approval of aretirement application is necessary to modify an application where good cause,reasonable grounds, and reasonable diligence are shown. II. We begin by recognizing that “[a] primary objective in establishing[pensions] is to induce able persons to enter and remain in public employment,and to render faithful and efficient service.” Geller v. Dep’t of Treasury, 53 N.J. 591, 597 (1969); accord In re Van Orden, 383 N.J. Super. 410, 421 (App.Div. 2006). Thus, pension statutes “should be liberally construed andadministered in favor of the persons intended to be benefited thereby .”Steinmann v. Dep’t of Treasury, 116 N.J. 564, 572 (1989) (quoting Geller, 53 N.J. at 597-98); see also Fiola v. Dep’t of Treasury, 193 N.J. Super. 340, 347(App. Div. 1984) (“It is virtually axiomatic that statutory pension provisionsare to be liberally construed in favor of public employees . . . .”). Accordingly, for nearly seven decades this Court has maintained that“[t]he power to reopen proceedings 'may be invoked by administrativeagencies to serve the ends of essential justice and the policy of the law. ’” In re 5 Van Orden, 383 N.J. Super. at 419 (quoting Handlon v. Town of Belleville, 4 N.J. 99, 107 (1950)); accord Duvin v. Bd. of Trs., PERS, 76 N.J. 203, 207(1978). That principle applies equally to the right to amend a retirementapplication. Generally, a “member shall have the right to withdraw, cancel, or changean application for retirement at any time before the member’s retirementallowance becomes due and payable by sending a written request signed by themember.” N.J.A.C. 17:3-6.3(a) (emphases added). “A member’s retirementallowance shall not become due and payable until 30 days after the date theBoard approved the application for retirement . . . .” N.J.A.C. 17:3-6.2. Although Pension Fund “[m]embership of any person shall cease . . . atdeath,” N.J.S.A. 18A:66-7(e), this Court has long held that membership is nota necessary condition of the right to modify a retirement application , seeDuvin, 76 N.J. at 207 (“While we agree with PERS that respondent’sapplication for accidental disability benefits was filed at a time whenrespondent had ceased to be a member of PERS, this is not fully dispositive ofthe matter.”). Accordingly, that a pensioner is not a member of the PensionFund when attempting to modify a retirement application does not on its ownpreclude such modification. Ibid. By the same logic, beneficiaries have beenallowed to change the retirement application of a deceased member of the 6 public pension systems. See Bumbaco v. Bd. of Trs., PERS, 325 N.J. Super. 90 (App. Div. 1999). Additionally, our common law “establishe[s] that the Board may honor apensioner’s request to reopen her retirement selection” upon “a showing ofgood cause, reasonable grounds, and reasonable diligence” even “after it is dueand payable.” Steinmann, 116 N.J. at 573; see Duvin, 76 N.J. at 207; see alsoHarris ex. rel. Harris v. Bd. of Trs., PERS, 378 N.J. Super. 459, 462-66 (App.Div. 2005) (tolling the pension modification period to permit a widower tomodify his late wife’s pension in light of her incapacity during that period).Therefore, notwithstanding N.J.A.C. 17:3-6.3(a)’s reference to the periodbefore an allowance “becomes due and payable,” an application for pensionbenefits may be amended whether or not pension benefits are due and payableupon the proper showing. Furthermore, although past cases invoking good cause to reopenretirement applications involved approved applications, we have never heldthat a retirement selection cannot be modified unless the application has beenapproved. See Steinmann, 116 N.J. at 572-73; Duvin, 76 N.J. at 207. To thecontrary, a retirement application, whether approved or not, may be reopenedand modified upon a showing of good cause, reasonable grounds, andreasonable diligence. 7 The pensioners in Steinmann and Duvin selected sub-optimal retirementoptions. Steinmann, 116 N.J. at 565; Duvin, 76 N.J. at 205-06. This Courtheld that the Steinmann pensioner had shown good cause for amending herpension designation and should have been permitted to do so, 116 N.J. at 577-78, and that the Duvin pensioner should have the opportunity at furtherproceedings to show good cause “for reopening his original pensionapplication and allowing him to claim accidental disability retirement in lieu ofearly retirement allowance,” 76 N.J. at 208. Here, Christine claims that David was mistaken when he selected the“early retirement” option for which he was ultimately ineligible and that hewas incapacitated from amending his selection thereafter. Because of thisalleged mistake and incapacity, the Board would have the Minsavages receiveonly a nominal benefit from the Pension Fund to which David contributed for297 months. We conclude the Board acted unreasonably by denying Christine’srequest to modify David’s retirement application upon its stated grounds. SeeIn re Stallworth, 208 N.J. 182, 194 (2011) (noting that agency decisions aresubject to reversal if they are “arbitrary, capricious, or unreasonable”). In thecase at hand, the interests of justice and a liberal reading of the applicablepension laws require that Christine be given an opportunity to present evidence 8 and prove at a hearing that she exercised reasonable diligence and seeks tomodify David’s retirement selection for good cause upon reasonable grounds.Such proof must include evidence that David qualified for ordinary disabilityretirement and that, but for his incapacity, he would have changed hisretirement selection to ordinary disability. III. The judgment of the Appellate Division is reversed and the matter remandedto the Board for further proceedings consistent with this opinion. CHIEF JUSTICE RABNER and JUSTICES LaVECCHIA, ALBIN, PATTERSON, FERNANDEZ-VINA, SOLOMON, and TIMPONE join in this opinion. 9