Court Opinion

ID: 4429291
Source: CourtListenerOpinion
Date Created: 2019-08-20 19:21:26.601492+00
Date Added: 2024-06-11T14:50:51.387460
License: Public Domain

NOT FOR PUBLICATION WITHOUT THE
              APPROVAL OF THE APPELLATE DIVISION

                                   SUPERIOR COURT OF NEW JERSEY
                                   APPELLATE DIVISION
                                   DOCKET NO. A-4327-17T4

                                      APPROVED FOR PUBLICATION

                                             February 21, 2019
IN RE ADOPTION OF N.J.A.C.
17:2-3.8 AND 17:2-3.13.                   APPELLATE DIVISION
_____________________________

           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'
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.

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                                       2
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

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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.

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                                        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."

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                                        5
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. 43:15A-

93 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.

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                                        6
      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-one-

half 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.

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                                        7
      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 thirty-

one 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 [thirty-
             one]-day period during which he would be entitled to
             exercise the conversion privilege, the amount of
             insurance with respect to which he could have

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                                       8
            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.

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                                       9
      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

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                                        10
            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.

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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
                          12
            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
                                       13
            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

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                                        14
               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]."

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                                       15
                                      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

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                                      16
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."

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                                       17
      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.

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                                       18
                                       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

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                                       19
            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
                                       20
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.

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      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

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[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.

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