Court Opinion

ID: 2732039
Source: CourtListenerOpinion
Date Created: 2014-09-11 14:04:54.585344+00
Date Added: 2024-06-11T15:45:52.263725
License: Public Domain

SYLLABUS

(This syllabus is not part of the opinion of the Court. 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 Supreme Court. Please note that, in the
interest of brevity, portions of any opinion may not have been summarized).

  Thomas Saccone v. Board of Trustees of the Police and Firemen’s Retirement System (A-49-12) (071841)

Argued February 4, 2014 -- Decided September 11, 2014

LaVECCHIA, J., writing for a majority of the Court.

         In this appeal, the Court considers whether the disabled child of a retired member of the Police and
Firemen’s Retirement System (PFRS) may have his or her survivors’ benefits paid into a first-party special needs
trust (SNT) created for him or her under 42 U.S.C.A. § 1396p(d)(4)(A).

         Thomas Saccone (Saccone) is a retired firefighter and a member of the PFRS. As a retired PFRS member,
Saccone receives a pension and other benefits in recompense for his service. His wife and son are entitled to receive
pension death benefits, or “survivors’ benefits,” if Saccone predeceases them. Following his death, those benefits
will be awarded directly to Saccone’s wife and son without passing through Saccone’s estate.

          Saccone’s son, Anthony, suffers from a severe mental disability and receives public assistance, which is
available only to individuals with incomes below a specified amount. Fearing that Anthony’s share of the survivors’
benefits would disqualify him from receiving public assistance, Saccone wanted to ensure that the PFRS survivors’
benefits for Anthony would be paid to the “Anthony J. Saccone Supplemental Benefits Trust.” Since assets held in
an SNT or supplemental benefits trust are not counted as income for the purpose of many public assistance
programs, Saccone believed that designating that the survivors’ benefit be paid to the trust would allow Anthony to
receive Saccone’s death benefits without jeopardizing his eligibility for public assistance.

          Saccone contacted the Division of Pension and Benefits (Division) seeking reassignment of the survivors’
benefits from Anthony as an individual to an SNT in Anthony’s name. The Division denied the request, stating that
the plain language of N.J.S.A. 43:16A-12.1(a) precluded him from changing the beneficiary of his survivors’
benefit. Saccone filed an administrative appeal with the PFRS Board of Trustees (Board), seeking to overturn the
Division’s decision. The Board refused to entertain Saccone’s request because Saccone was still alive, and,
therefore, it believed that any decision relating to the assignment of Saccone’s survivors’ benefits would be an
advisory opinion. The Appellate Division affirmed. This Court granted Saccone’s petition for certification,
summarily reversed, and remanded the case to the Board for a decision on the merits. Saccone v. Bd. of Trs., Police
& Firemen’s Ret. Sys., 212 N.J. 564, 564-65 (2011).

          On remand, the Board rejected Saccone’s claim on the merits, finding that the PFRS statutory framework
did not permit Saccone to designate a trust as the beneficiary of his survivors’ benefits. On appeal, the Appellate
Division affirmed the Board’s administrative determination, concluding that the Legislature had purposefully
eliminated a PFRS member’s ability to assign a trust as a beneficiary. The panel further noted that its decision did
not conflict with New Jersey’s public policy favoring the establishment of SNTs and that Saccone could not fund an
SNT with Anthony’s share of survivors’ benefits because those benefits belong to Anthony. Accordingly, the panel
concluded that the Board’s determination was not arbitrary, unreasonable, or capricious. This Court granted
certification. 213 N.J. 387 (2013). This Court also granted the motions of the Special Needs Alliance (SNA), the
New Jersey Chapter of the National Academy of Elder Law Attorneys (NAELA), and the Guardianship Association
of New Jersey (GANJ) to appear as amici curiae.

HELD: The disabled child of a retired member of the PFRS may have his or her survivors’ benefits paid into a first-
party SNT created for him or her under 42 U.S.C.A. § 1396p(d)(4)(A).

1. The PFRS is a statewide pension system for full-time policemen and firemen designed to ensure the protection of
all such officers through pensions payable from the fund. Upon the death of a PFRS member, two benefits become
payable to the member’s surviving beneficiaries: a monthly survivors’ pension benefit payable to the PFRS

                                                         1
member’s surviving spouse and children pursuant to N.J.S.A. 43:16A-12.1(a), and a group life insurance benefit
pursuant to N.J.S.A. 43:16A-59. By creating an automatic death benefit payable to the member’s surviving spouse
and children, the Legislature eliminated a member’s ability to name beneficiaries. (pp. 13-14)

2. An agency’s determination on the merits will be sustained unless there is a showing that it is arbitrary, capricious,
or unreasonable, or that it lacks fair support in the record. The Court must discern the Legislature’s intent. The
plain language of the statute is the starting point for its analysis. If a statute’s clear language creates ambiguity,
extrinsic evidence may help guide the construction of the statute. While a PFRS member is not free to designate any
beneficiary he or she so chooses, it does not necessarily follow that the language of the statute forecloses the
possibility of designating a trust for the benefit of one of the statutorily designated beneficiaries, particularly given
the strong public policy favoring the protection of a public employee’s family. (pp. 15-17)

3. Federal public assistance programs provide aid to disabled individuals whose income does not exceed a specified
amount. The survivors’ death benefit that Anthony would receive if his father predeceases him, if paid directly to
Anthony, would be considered income and could impair his receipt of public assistance. This consequence may be
avoided through the use of an SNT, which is a trust intended to allow a disabled individual to maintain eligibility for
certain needs-based government benefits. The trust stands in the place of the disabled beneficiary, and the assets
held by the trust do not count as income for public assistance purposes. Upon the death of the beneficiary, state
medical assistance providers are reimbursed from any remaining assets in the trust up to the total amount spent on
the beneficiary’s medical care. (pp. 18-22)

4. The question on appellate review is whether the Board acted arbitrarily, capriciously, or unreasonably in
declining to consider an SNT as Anthony’s proposed equivalent, thereby allowing him to receive his future
survivors’ death benefit, without losing public assistance, should his father predecease him. Here, the Board’s
response is contrary to the legislative policy underlying the statute. Paying Anthony’s share of survivors’ benefits to
an SNT established for his sole benefit is equivalent to paying those benefits to Anthony himself. Any assets
remaining in the trust following the life of the disabled person must be repaid to the State. This protects Anthony’s
financial interest and furthers the Legislature’s public policies in favor of both SNTs and survivors’ benefits. In that
vein, the Appellate Division erroneously concluded that the Legislature’s failure to explicitly sanction “Miller
trusts” established by 42 U.S.C.A. § 1396p(d)(4)(B) implicitly suggested that all self-settled or first-party SNTs
were impermissible under New Jersey law. As amicus NAELA explained, the Legislature was unable to authorize
Miller trusts because federal law prohibits the use of such trusts in states, like New Jersey, that make use of a
medically needy Medicaid plan. There is, however, no compelling reason to conclude that the Legislature meant,
by its silence, to prohibit the use of a self-settled or first-party SNT created pursuant to 42 U.S.C.A. §
1396p(d)(4)(A). (pp. 23-25)

5. Disabled persons, like Anthony, are financially impaired by the Board’s and the Appellate Division’s strict
construction of the survivors’ benefits statute. The Court cannot conclude that the Legislature would abide a
statutory construction that disserves the very people it was intended to help. The Board’s view of the word “child”
in the survivors’ benefits statute forces the disabled child of a PFRS retiree to choose between abandoning the
survivors’ benefits earned by his parent or forgoing public assistance programs for his medical needs. This serves
no legitimate public policy. The reference to “child” in N.J.S.A. 43:16A-12.1(a) is equivalent to a first-party SNT
established for a disabled child, such as Anthony, pursuant to 42 U.S.C.A. § 1396p(d)(4)(A). The Board erred in not
accommodating Saccone’s request to reform the manner in which Anthony would receive any future survivors’
benefits by having the survivors’ benefits be paid into a first-party SNT for Anthony. The Board’s contrary
determination, affirmed by the Appellate Division, was arbitrary, capricious, and unreasonable. (pp. 26-28)

          The judgment of the Appellate Division is REVERSED. The Board’s determination is set aside and the
matter is REMANDED to the Board for further administrative action consistent with this opinion.

         JUDGE CUFF, DISSENTING, joined by JUSTICE PATTERSON, expresses the view that the plain
language of N.J.S.A. 43:16A-12.1(a) prohibits a PFRS member from designating the beneficiary of his or her
survivors’ benefits.

                                                           2
        CHIEF JUSTICE RABNER, JUSTICE FERNANDEZ-VINA, and JUDGE RODRÍGUEZ
(temporarily assigned) join in JUSTICE LaVECCHIA’s opinion. JUDGE CUFF (temporarily assigned) filed
a separate, dissenting opinion in which JUSTICE PATTERSON joins. JUSTICE ALBIN did not participate.

                                                 3
                                     SUPREME COURT OF NEW JERSEY
                                       A-49 September Term 2012
                                                071841

THOMAS SACCONE,

    Plaintiff-Appellant,

         v.

BOARD OF TRUSTEES OF THE
POLICE AND FIREMEN'S
RETIREMENT SYSTEM,

    Defendant-Respondent.

         Argued February 4, 2014 – Decided September 11, 2014

         On certification to the Superior Court,
         Appellate Division.

         Donald D. Vanarelli argued the cause for
         appellant (Law Office of Donald D.
         Vanarelli, attorney; Mr. Vanarelli and
         Whitney W. Bremer, on the brief).

         Melissa H. Raksa, Assistant Attorney
         General, argued the cause for respondent
         (John J. Hoffman, Acting Attorney General of
         New Jersey, attorney; Jeremy M. Vaida and
         Diane J. Weeden, Deputies Attorney General,
         on the letter briefs).

         Ron M. Landsman, a member of the Maryland
         bar, argued the cause for amicus curiae
         Special Needs Alliance, Inc. (Schenck,
         Price, Smith & King, attorneys; Shirley B.
         Whitenack, of counsel; Mr. Landsman, and Ms.
         Whitenack, on the brief).

         Daniel J. Jurkovic argued the cause for
         amici curiae National Academy of Elder Law
         Attorneys, New Jersey Chapter and
         Guardianship Association of New Jersey, Inc.

                               1
         (Mr. Jurkovic and Robert F. Brogan, on the
         brief).

         John W. Callinan argued the cause for amicus
         curiae National Academy of Elder Law
         Attorneys, Inc.

    JUSTICE LaVECCHIA delivered the opinion of the Court.

    In this appeal, we review whether the disabled son of a

retired member of the Police and Firemen’s Retirement System

(PFRS) may have his survivors’ benefits paid into a first-party

special needs trust (SNT) created for him under 42 U.S.C.A.

§ 1396p(d)(4)(A).    We hold that he may and reverse the contrary

administrative action by the PFRS Board of Trustees (Board).

    The Board’s strict view of how to implement the word

“child” in the survivors’ benefits statute when dealing with the

circumstances of a Supplemental Security Income (SSI) eligible

disabled child of a PFRS retiree would have forced this class of

beneficiary into an untenable situation.     The Board’s

determination required a disabled child of a PFRS retiree to

have to choose between abandoning the survivors’ benefit earned

by his father and forgoing public assistance programs for his

medical needs.    That choice is harsh and unwarranted.    No

legitimate public policy is advanced by the Board’s

interpretation.     Both the federal government’s SSI and related

medical assistance programs and New Jersey’s SNT statutes permit

the use of self-settled (d)(4)(A) SNTs.     We reject as arbitrary,

                                   2
capricious, and unreasonable the Board’s interpretive

determination that foists on disabled children of PFRS retirees,

such as the child involved here, what is essentially a

forfeiture of survivors’ benefits.

                                 I.

     Thomas Saccone (Saccone) is a retired Newark firefighter

and a member of the Police and Firemen’s Retirement System.     As

a retired PFRS member, Saccone receives a pension and other

benefits in recompense for his service.    See generally N.J.S.A.

43:16A-1 to -68.    In addition, Saccone’s wife and son are

entitled to receive pension death benefits, or “survivors’

benefits,” if Saccone predeceases them.    See N.J.S.A. 43:16A-

12.1(a).   Following his death, those benefits are awarded

directly to Saccone’s wife and son; they do not pass through

Saccone’s estate.

     Saccone’s son, Anthony, suffers from a severe mental

disability and currently receives public assistance in the form

of SSI and other programs.   However, those forms of public

assistance are available only to individuals with incomes below

a specified amount.1   Fearing that Anthony’s statutorily directed

1
  For example, the maximum unearned income an unmarried disabled
person in New Jersey may receive and remain eligible for SSI
benefits is $772.25. A disabled person’s resources also may not
exceed $2000. For each dollar of unearned income received over
twenty dollars, the maximum SSI benefit of $752.25 is reduced by
that amount. See 42 U.S.C.A. § 1382(a)(1)(B), (3)(B); Soc. Sec.
                                  3
share of the survivors’ benefits would place him over the SSI

income cap and thereby disqualify him from receiving public

assistance, Saccone wanted to ensure that the PFRS survivors’

benefits for Anthony would be paid to the “Anthony J. Saccone

Supplemental Benefits Trust.”   Because assets held within a

supplemental benefits trust are not counted as income for the

purpose of many public assistance programs, Saccone believed

that designating a supplemental benefits or special needs trust2

as the beneficiary in Anthony’s stead would allow Anthony to

receive Saccone’s death benefits without jeopardizing Anthony’s

eligibility for public assistance.

Admin., Program Operations Manual System (POMS) § SI 00810.001
(2011), available at http://policy.ssa.gov/poms.nsf/lnx/
0500810001; Soc. Sec. Admin., Social Security: A Guide to
Supplemental Security Income (SSI) for Groups and Organizations
8, 10-15 (2014), available at http://www.ssa.gov/pubs/EN-05-
11015.pdf.
2
    A special needs trust is

            a form of discretionary trust that permits
            disabled persons (or others acting on their
            behalf, such as guardians or conservators)
            to place the assets of the disabled person
            in a trust (or to place assets of others in
            a trust) for the supplemental benefit of the
            disabled person but to still maintain that
            person’s qualification for state and federal
            support and medical benefits.

            [Walter L. Nossaman & Joseph L. Wyatt, Jr.,
            Trust Administration & Taxation § 24.02A
            (2014) (citations omitted).]
                                 4
    On August 18, 2008, Saccone’s attorney wrote to the

Division of Pension and Benefits (Division) seeking reassignment

of the survivors’ benefits from Anthony as an individual to an

SNT in Anthony’s name.   The letter explained that, “[d]ue to

Anthony’s disability and the benefits he receives as a disabled

person, he cannot receive any additional assets outright.

Therefore, it is necessary for Mr. Saccone to change the

beneficiary designation on his pension fund . . . .”   The

Division denied Saccone’s request in a letter dated September 4,

2008.   In its letter, the Division stated that, under the plain

language of N.J.S.A. 43:16A-12.1(a), Saccone could not change

the beneficiary of his death benefits.   Further, the Division

stated that it would not “be a party to an effort to enable

[Anthony] to continue to be eligible for public assistance by

not reporting the benefit he receives as a beneficiary as

taxable income.”   Saccone’s request that the Division reconsider

its decision also was denied.

    Saccone filed an administrative appeal with the Board,

seeking to overturn the Division’s decision.   The Board

initially refused to entertain Saccone’s request because Saccone

was still alive, and, therefore, it believed that any decision

relating to the assignment of Saccone’s survivors’ benefits

would be an advisory opinion.   The Appellate Division affirmed

that decision.   We granted Saccone’s petition for certification

                                 5
and summarily reversed and remanded the case to the Board for a

decision on the merits.     Saccone v. Bd. of Trs., Police &

Firemen’s Ret. Sys., 212 N.J. 564, 564-65 (2011).

    On remand, the Board rejected Saccone’s claim on the

merits, finding that the PFRS statutory framework did not permit

Saccone to designate a trust as the beneficiary of his

survivors’ benefits.    Based on its review of the text of

N.J.S.A. 43:16A-12.1(a), the Board concluded that PFRS

survivors’ benefits vest “automatically” in the decedent’s

spouse and children upon the death of the PFRS member.       Cf.

N.J.A.C. 17:4-3.4(a) (noting that eligible survivors are

“entitled to benefits on the first day of the month following

the member’s death”).     As a result, the Board determined that

Saccone was unable to assign a trust in his son’s name as a

beneficiary.   As additional support, the Board pointed to

N.J.A.C. 17:4-3.5(b), which states that “[a] retiree cannot

designate a primary or a contingent beneficiary for the receipt

of the retiree’s accumulated pension contributions in the event

of the retiree’s death.”    The Board also contrasted the language

of the survivors’ benefits statute with that of the PFRS group

life insurance statute, N.J.S.A. 43:16A-59.     Unlike the

survivors’ benefits statute, the group insurance statute

specifically provides that a retiree may designate any

individual as a beneficiary, not just a spouse or child.       See

                                   6
N.J.S.A. 43:16A-59 (“Benefits under such group [insurance]

policy . . . shall be paid . . . to such person . . . as the

member shall have nominated . . . .”); see also N.J.A.C. 17:1-

5.4(a).   Accordingly, the Board determined that the Legislature

intended to restrict the potential beneficiaries of a PFRS

member’s death benefits to a member’s spouse and children.

    On appeal, the Appellate Division affirmed the Board’s

administrative determination in an unpublished decision.     The

panel examined the relevant legislative history and compared the

language of the current survivors’ benefits statute, N.J.S.A.

43:16A-12.1, with that of its predecessor, N.J.S.A. 43:16A-12.

The panel noted that, as initially enacted, N.J.S.A. 43:16A-12

allowed a PFRS member to designate any individual to receive

that member’s pension death benefits; however, when the

Legislature enacted N.J.S.A. 43:16A-12.1 in 1967, it repealed

the ability of a PFRS member to choose the beneficiary of his or

her survivors’ benefits.   Instead, those benefits now must go to

the deceased PFRS member’s spouse and children.   In light of

that change, the Appellate Division concluded that the

Legislature had purposefully eliminated a PFRS member’s ability

to assign a trust as a beneficiary under N.J.S.A. 43:16A-12.1.

    The panel also determined that its decision did not

conflict with New Jersey’s public policy favoring the

establishment of SNTs.   The panel compared the three types of

                                 7
SNTs authorized under the federal Medicaid statute, 42 U.S.C.A.

§ 1396p(d)(4)(A)-(C), with the two types of SNTs authorized in

the New Jersey SNT statute, N.J.S.A. 3B:11-37.   Noting that the

Legislature had not adopted the type of SNT authorized by 42

U.S.C.A. § 1396p(d)(4)(B), which enables a third party to

establish an SNT on behalf of a disabled person if the SNT is

composed entirely of pension or Social Security benefits due to

that disabled person, the panel concluded that such trusts were

impermissible in New Jersey.    The panel further concluded that

New Jersey’s SNT statute does not allow a person to fund an SNT

with benefits belonging to someone else.    Accordingly, the

Appellate Division held that, under N.J.S.A. 3B:11-37, Saccone

could not fund an SNT with Anthony’s share of survivors’

benefits because those benefits belong to Anthony, not to

Saccone.

    Finally, the panel stated that Saccone had not demonstrated

the inability of other estate planning approaches to protect

Anthony’s eligibility for public assistance benefits.

Accordingly, the panel concluded that the Board’s determination

was not arbitrary, unreasonable, or capricious and affirmed its

decision.

    We granted certification.    213 N.J. 387 (2013).   We also

granted amicus curiae status to the Special Needs Alliance, the

                                 8
National Academy of Elder Law Attorneys, and the Guardianship

Association of New Jersey.

                                II.

                                A.

    Saccone maintains that the Board adopted, and the Appellate

Division affirmed, a cramped interpretation of the PFRS

survivors’ benefits statute that conflicts with the fundamental

purpose of the legislation, namely, to protect the financial

stability of a retiree’s spouse and children.     Saccone argues

that, should the Appellate Division’s decision be upheld, the

distribution of survivors’ benefits to Anthony would actually

become a survivor’s detriment, rendering him ineligible for

various forms of public assistance benefits and impairing his

financial situation.   In other words, under the Appellate

Division’s construction, Anthony would be adversely impacted by

receiving his share of the survivors’ benefits.    Saccone argues

that such a result is plainly at odds with the Legislature’s

intent in providing survivors’ benefits and undermines the

Legislature’s clear policy favoring the establishment of SNTs.

He contends this Court should sanction the use of an SNT to

safeguard Anthony’s eligibility for public assistance and

thereby ensure that the survivors’ benefits help, rather than

harm, Anthony.

                                 9
    Saccone also maintains that alternative forms of estate

planning will not protect Anthony’s eligibility for public

assistance programs.   Saccone emphasizes that any direct

distribution of survivors’ benefits to Anthony will almost

certainly place him over the income cap for various public

assistance programs and ultimately harm his financial well-

being.   He alleges that only the creation of an SNT, funded

directly by the survivors’ benefits, will guarantee that

Anthony’s income level will not limit his ability to receive

public assistance and will avoid placing him in a worse position

than before he received the survivors’ benefits.

                                B.

    The Board argues in support of the Appellate Division

decision.   The Board maintains that the text of N.J.S.A. 43:16A-

12.1(a) clearly indicates that survivors’ benefits may be paid

only to a retiree’s spouse or children.    For that reason, the

Board asserts that a retiree cannot control or modify the

beneficiaries designated by the statute.    The Board points out

that the previous survivors’ benefits statute, N.J.S.A. 43:16A-

12, allowed a retiree to designate any person as a beneficiary

of pension death benefits.   According to the Board, the

Legislature’s adoption of N.J.S.A. 43:16A-12.1 was aimed at

restricting potential beneficiaries to a retiree’s spouse or

children.   Thus, the Board asserts that allowing Saccone to

                                10
assign Anthony’s share of the survivors’ benefits to an SNT in

Anthony’s name would run counter to the Legislature’s express

intent.    The Board also argues that N.J.A.C. 17:4-3.5(b), which

prohibits a retiree from designating a primary or contingent

beneficiary as the recipient of the retiree’s pension benefits,

is consistent with the restrictive approach of N.J.S.A. 43:16A-

12.1(a).

    Moreover, the Board argues that survivors’ benefits do not

exist until a retiree’s death and therefore are not assignable

by the retiree himself.   Instead, the Board claims that such

benefits vest automatically in the retiree’s spouse and children

upon the retiree’s death.   For that reason, the Board asserts

that the survivors’ benefits are Anthony’s property and are

beyond Saccone’s ability to assign.

                                 C.

    The three amici, Special Needs Alliance (SNA), the New

Jersey Chapter of the National Academy of Elder Law Attorneys

(NAELA), and the Guardianship Association of New Jersey (GANJ),

appear in this case in support of Saccone.    The amici have

assisted in the analysis of the issues raised by Saccone’s

petition as true friends of the Court.   Each amicus has

submitted extensive information about SNTs, the relationship of

SNTs to the provision of federal public assistance programs, and

the role that SNTs should be permitted to play in connection

                                 11
with survivors’ benefits under the PFRS.    For efficiency’s sake,

the amici’s informative research is woven into our analysis.

For present purposes, their respective submissions can be

distilled as follows.

        The amici uniformly contend that Saccone should be

permitted to establish an SNT in accordance with 42 U.S.C.A.

§ 1396p(d)(4)(A), which allows a parent to establish a trust for

the sole benefit of his or her disabled child during the child’s

lifetime.3   The amici inform the Court that any assets remaining

in a (d)(4)(A) SNT at the time of the child’s death are used to

repay any state Medicaid benefits previously received.   Thus,

only Anthony could benefit from the establishment of such a

trust in this instance.    The amici urge the Court to view such a

(d)(4)(A) SNT in Anthony’s name simply as an extension of

Anthony when construing N.J.S.A. 43:16A-12.1(a).

     Further, the amici argue that allowing the use of such an

SNT in Anthony’s circumstances furthers the public policy

considerations that led the Legislature to ensure that death

benefits are afforded to the survivors of retired members of the

PFRS.    The survivors’ benefits statute exists for the sole

purpose of aiding the spouse and children of deceased PFRS

3
  Although Saccone initially proposed use of an SNT, he
subsequently refined his argument in recognition that the proper
SNT to use for Anthony would be one created pursuant to §
1396p(d)(4)(A), as the amici have explained in detail.
Saccone’s argument on appeal has centered on that form of SNT.
                                 12
members.   For a disabled person such as Anthony, unless he can

receive his benefits through the vehicle of an SNT established

under § 1396p(d)(4)(A), the survivors’ benefits would become a

financial detriment, disserving the very individual they were

intended to help.

                               III.

    PFRS is “a statewide pension system for full-time policemen

and firemen designed to ensure the uniform protection of all

such public officers through the medium of pensions payable from

[the] fund.”   Seire v. Police & Fire Pension Comm’n of Orange, 6

N.J. 586, 591 (1951); accord N.J.S.A. 43:16A-2.    PFRS not only

provides for the financial well-being of retired police and

firemen, but also ensures financial stability for their

surviving spouses and children.    See Eyers v. Bd. of Trs., Pub.

Emps.’ Ret. Sys., 91 N.J. 51, 56-57 (1982).

    Upon the death of a PFRS member, two benefits become

payable to the member’s surviving beneficiaries:   a monthly

survivors’ pension benefit payable to the PFRS member’s

surviving spouse and children pursuant to N.J.S.A.

43:16A-12.1(a), and a group life insurance benefit pursuant to

N.J.S.A. 43:16A-59.   When the monthly survivors’ pension benefit

was originally created in 1944, N.J.S.A. 43:16A-12 permitted

PFRS members to elect one of three optional retirement plans

with varying actuarial values and to designate any beneficiary

                                  13
as the recipient of the benefit.      See L. 1944, c. 255 (repealed

1967).   However, in 1967, the Legislature repealed N.J.S.A.

43:16A-12 and enacted N.J.S.A. 43:16A-12.1, which eliminated the

three optional retirement plans in lieu of a life annuity

automatically payable to the PFRS member’s surviving spouse and

children.    See L. 1967, c. 250, § 26.

    In its current form, the statute provides that

            [u]pon the death after retirement of any
            member of the retirement system there shall
            be paid to the member’s widow or widower a
            pension of 50% of final compensation for the
            use of herself or himself, to continue
            during her or his widowhood, plus 15% of
            such compensation payable to one surviving
            child   or   an  additional    25%  of    such
            compensation to two or more children; if
            there is no surviving widow or widower or in
            case the widow or widower dies or remarries,
            20% of final compensation will be payable to
            one    surviving   child,    35%   of    such
            compensation to two surviving children in
            equal shares and if there be three or more
            children, 50% of such compensation would be
            payable to such children in equal shares.

            [N.J.S.A. 43:16A-12.1(a).]

By creating an automatic death benefit payable to the PFRS

member’s surviving widow and children, the Legislature

eliminated a member’s ability to choose an actuarial value and

to name beneficiaries.    This amendment evinced an intent to

ensure that a PFRS member’s surviving spouse and children

received the monthly death benefit.

                                 14
    In its final agency determination in the instant case, the

Board relied on the text of N.J.S.A. 43:16A-12.1(a) to reject

Saccone’s request to have his death benefit paid to an SNT for

the benefit of his son.     An agency’s determination on the merits

“will be sustained unless there is a clear showing that it is

arbitrary, capricious, or unreasonable, or that it lacks fair

support in the record.”     Russo v. Bd. of Trs., Police &

Firemen’s Ret. Sys., 206 N.J. 14, 27 (2011) (quoting In re

Herrmann, 192 N.J. 19, 27-28 (2007)) (internal quotation mark

omitted).   However, when an agency’s decision is based on the

“agency’s interpretation of a statute or its determination of a

strictly legal issue,” we are not bound by the agency’s

interpretation.   Ibid.   Statutory interpretation involves the

examination of legal issues and is, therefore, a question of law

subject to de novo review.     McGovern v. Rutgers, 211 N.J. 94,

107-08 (2012); Russo, supra, 206 N.J. at 27; State v. Gandhi,

201 N.J. 161, 176 (2010).

    When discerning the meaning of a statute, our role “is to

discern and effectuate the intent of the Legislature.”       Murray

v. Plainfield Rescue Squad, 210 N.J. 581, 592 (2012); accord

N.J. Dep’t of Children & Families v. A.L., 213 N.J. 1, 20

(2013); Allen v. V & A Bros., 208 N.J. 114, 127 (2011).       Toward

that end, the plain language of the statute provides the

starting point for the analysis.       In re Kollman, 210 N.J. 557,

                                  15
568 (2012).    The language of the statute must be construed in

accordance with its ordinary and common-sense meaning.     State ex

rel. K.O., 217 N.J. 83, 94 (2014); Murray, supra, 210 N.J. at

592.

       However, if a statute’s seemingly clear language

nonetheless creates ambiguity in its concrete application,

extrinsic evidence may help guide the construction of the

statute.    See Kollman, supra, 210 N.J. at 568.   Extrinsic guides

may also be of use “if a literal reading of the statute would

yield an absurd result, particularly one at odds with the

overall statutory scheme.”    Wilson ex rel. Manzano v. City of

Jersey City, 209 N.J. 558, 572 (2012).

                                 IV.

                                 A.

       While the language of N.J.S.A. 43:16A-12.1 makes clear that

a PFRS member is not free to designate any beneficiary he or she

so chooses as the recipient of the death benefit, it does not

necessarily follow that the language forecloses the possibility

of designating a trust for the benefit of one of the statutorily

designated beneficiaries.    Indeed, the motivating force behind

the Legislature’s enactment of N.J.S.A. 43:16A-12.1 appears to

have been the financial well-being of a member’s surviving

spouse and children.    Cf. 37 N.J.R. 4521(a) (Dec. 5, 2005)

(clarifying Board’s position that member’s contributions are

                                 16
accumulated to fund survivor benefits and are not refunded to

member).     New Jersey’s courts have long emphasized that pension

statutes are “remedial in character” and “should be liberally

construed . . . in favor of the persons intended to be benefited

thereby.”    Geller v. Dep’t of Treasury, 53 N.J. 591, 597-98

(1969).     Pension benefits, which include death benefits payable

to the surviving spouse and children of a retired PFRS member,

are part of the member’s recompense for past service.     See

Steinmann v. Dep’t of Treasury, 116 N.J. 564, 572-73 (1989)

(citing Geller, supra, 53 N.J. at 597-98) (noting compensatory

nature of pensions); Masse v. Bd. Of Trs., Pub. Emps. Ret. Sys.,

87 N.J. 252, 260-62 (1981) (reviewing judicial recognition of

pensions as compensation for services rendered).     The Board has

been reminded of its obligation to consider the equities of each

public employee’s unique and individual circumstances when

applying its regulations.     See In re Van Orden, 383 N.J. Super.

410, 418-19 (App. Div. 2006).

    There is a recognized strong public policy favoring the

financial protection of a public employee’s family.     See Eyers,

supra, 91 N.J. at 57.     Accordingly, decisions have held that

public policy militates in favor of assuring support for

financially dependent ex-spouses by permitting equitable

distribution of pension funds despite statutory language

exempting pension payments from court process.     See Cleveland v.

                                  17
Bd. of Trs., Police and Firemen's Ret. Sys., 229 N.J. Super.

156, 159-160 (App. Div. 1988).    Public policy also favors a

public employee’s ability to provide adequately for the well-

being of his disabled child after his death.

                                  B.

    Federal public assistance programs provide aid and services

to permanently disabled individuals whose income does not exceed

a specified amount.    See 42 U.S.C.A. § 1382(a)-(b).    For

example, New Jersey Medicaid provides coverage for New Jersey

residents who are determined to be blind or disabled by either

the Social Security Administration or the Division of Medical

Assistance and Health Services.    See N.J.A.C. 10:71-3.10

to -3.12.   The Social Security Administration’s SSI program also

provides assistance to blind or disabled persons.       42 U.S.C.A.

§ 1381a.    Both programs are available only to persons whose

gross monthly income and resources fall below a statutorily

established threshold.    See 42 U.S.C.A. § 1382(a)(1)(B), (3)(B).

In those contexts, gross monthly income is comprised of, among

other things, the total social security income, veterans’

benefits, pensions, dividends, and payments from trust funds

received.   See N.J.A.C. 10:71-4.4, :71-5.1 to -5.4.

    The PFRS survivors’ death benefit that Anthony would

receive if his father predeceases him, so long as it is paid

directly to Anthony, would be considered income and could impair

                                  18
his receipt of public assistance.      Even if a check payable to

Anthony were deposited into a trust fund established for

Anthony, the benefits check would be treated as income to him

and would impact his eligibility for public assistance.      See

N.J.A.C. 10:71-5.1.   Any direct payments to Anthony, even if

later transferred into a trust, will count towards his income

for that year and disqualify him from receiving various forms of

public assistance.    That is so because trust fund assets are

normally considered income for the purpose of assistance

eligibility.   See, e.g., 42 U.S.C.A. § 1396p(d)(1)-(3) (stating

all trust assets except those held in trusts established under §

1396p(d)(4) are considered resources available to individual).

However, Congress and our Legislature have created an exception

to that rule for special needs trusts established in accordance

with 42 U.S.C.A. § 1396p(d)(4).     See N.J.S.A. 3B:11-37.

    The loss of public assistance is undoubtedly detrimental to

the well-being of a disabled person, particularly when the

income received from a pension alone does not cover the cost of

needed medical services.   Such a result runs counter to the

Legislature’s expressed intent to provide for the well-being of

a PFRS member’s surviving beneficiaries.

    However, as the amici explain in detail, that consequence

may be avoided through the use of a special needs trust.      SNTs

are legitimate planning tools as recognized by this Court.         “A

                                  19
special needs trust is a trust that is intended to allow a

disabled individual to maintain eligibility for certain needs-

based government benefits.”     J.B. v. W.B., 215 N.J. 305, 322

(2013).   SNTs may be “an effective tool to plan for the future

of a disabled minor or adult child.”     Id. at 324.   Congress has

authorized the use of certain forms of SNTs designed to avoid

the loss of public assistance provided to a permanently disabled

person.   See 42 U.S.C.A. § 1396p(d)(4).    Our Legislature

subsequently endorsed the use of SNTs for that purpose as well.

See N.J.S.A. 3B:11-36 to -37.    The Legislature specifically

noted that “[i]t is in the public interest to encourage persons

to set aside amounts to supplement and augment assistance

provided by government entities to persons with severe chronic

disabilities.”   N.J.S.A. 3B:11-36(a).   In passing N.J.S.A.

3B:11-37(a), the Legislature embraced SNTs to the fullest extent

permitted by federal law.

    In contrast to a special needs trust established by third-

parties using their own resources for the benefit of another,

self-settled or first-party SNTs are funded solely by assets

owned by the beneficiary, or by assets to which the beneficiary

is legally entitled.   See Walter L. Nossaman & Joseph L. Wyatt,

Jr., Trust Administration & Taxation § 24.02A[1] (2014).       In a

self-settled SNT, the trust stands in the place of the disabled

beneficiary, and the assets held by the trust are held solely

                                  20
for the benefit of the disabled beneficiary without counting as

income for the purposes of public assistance.     See 42 U.S.C.A.

§ 1382b(e)(6)(C)(i); J.B., supra, 215 N.J. at 322.     In a

circumstance such as Anthony’s, the amici and Saccone maintain

that a self-settled SNT established under 42 U.S.C.A. §

1396p(d)(4)(A) may be used to effectuate the Legislature’s

intent in respect of the monthly survivors’ pension.

    A (d)(4)(A) SNT is

         [a] trust containing the assets of an
         individual under age 65 who is disabled . .
         . and which is established for the benefit
         of such individual by a parent . . . if the
         State will receive all amounts remaining in
         the trust upon the death of such individual
         up to an amount equal to the total medical
         assistance paid on behalf of the individual
         under a State plan.

         [42 U.S.C.A. § 1396p(d)(4)(A).]

A (d)(4)(A) SNT is established for the sole benefit of the

beneficiary and is irrevocable.    See N.J.A.C.

10:71-4.11(g)(1)(ii), (viii).    The trust res may consist of the

beneficiary’s assets, which in this context may include income

and financial resources.   See 42 U.S.C.A. § 1396p(h)(1).     A

(d)(4)(A) SNT may be established, as in Anthony’s case, by a

parent; however, the disabled beneficiary is, in most cases,

considered to be the trust’s grantor for income tax purposes.

See 26 U.S.C.A. §§ 673-677.     Further, as required by the

authorizing federal statute, upon the death of the beneficiary,

                                  21
state medical assistance providers are reimbursed from any

remaining trust res up to the total amount spent on the

beneficiary’s medical care.     42 U.S.C.A. § 1396p(d)(4)(A);

accord N.J.A.C. 10:71-4.11(g)(1)(xii).     Therefore, a (d)(4)(A)

SNT is considered a first-party trust because only assets to

which the beneficiary is entitled are used to establish the

trust and the beneficiary is the only person permitted to

receive the benefit of the trust funds.     The trust res is not

considered to be income or an asset for the purposes of public

assistance.   See 42 U.S.C.A. § 1382b(e)(6)(C)(i); J.B., supra,

215 N.J. at 322.

                                  C.

    Saccone’s inartfully worded request to “change the

beneficiary” of the survivors’ death benefits due to Anthony

under the PFRS to an SNT benefiting Anthony started this dispute

down the wrong analytic path.    Saccone’s request should have

been evaluated for what it was in substance, not in form.       It

was not truly a change-in-beneficiary designation, as the Board

initially treated it.   That characterization led to an easy

rejection of the request as one beyond Saccone’s ability because

survivors’ death benefits are not assignable.     The 1967

legislative amendment ensured that such benefits go to a

deceased retired PFRS member’s survivors.     In other words, the

benefits belong to Anthony.     They are not Saccone’s to assign.

                                  22
    In its substance, however, the request merely asked the

Board to recognize and treat a proper self-settled or first-

party SNT as the equivalent of Anthony, if and when the Board

had to fulfill the legislative promise of N.J.S.A. 43:16A-

12.1(a) and provide a survivors’ benefit to Anthony.    In

executing a legislative scheme that is entrusted to it, a

government agency is expected to administer the scheme with the

underlying legislative policies foremost in mind.   That

principle applies in force when the legislative scheme is

remedial in nature.    See In re Adoption of N.J.A.C. 5:96, 215

N.J. 578, 615-16 (2013) (noting agency not free to abandon

remedial approach applicable under statute); Hardwicke v. Am.

Boychoir Sch., 188 N.J. 69, 90 (2006) (noting remedial statutes

should be interpreted liberally); Liberty Mut. Ins. Co. v. Land,

186 N.J. 163, 173 (2006) (stating statute’s provisions must be

construed “liberally to accomplish the Legislature’s broad

remedial goals”).

    Properly viewed, the question on appellate review is

whether the Board acted arbitrarily, capriciously, or

unreasonably in declining to consider an SNT as Anthony’s

proposed equivalent, thereby allowing him to receive his future

survivors’ death benefit, should his father predecease him,

through a vehicle that prevents the benefit from becoming a

financial liability.   So viewed, the Board’s response is

                                 23
contrary to the legislative policy underlying the statute the

Board was charged with executing for the benefit of its members.

    Paying Anthony’s share of survivors’ benefits to an SNT

established for the sole benefit of Anthony is equivalent to

paying those benefits to Anthony himself.    It is not an

assignment of those benefits at all.   That is so because an SNT

established pursuant to 42 U.S.C.A. § 1396p(d)(4)(A) is for the

sole benefit of the disabled person.   Moreover, by definition,

any assets remaining in a (d)(4)(A) trust following the life of

the disabled person must be repaid to the state.    Thus, there

can be no meaningful concern that allowing Anthony’s first-party

SNT, created pursuant to 42 U.S.C.A. § 1396p(d)(4)(A), to

receive his share of survivors’ benefits will somehow allow

Saccone to divert the survivors’ benefits to any individual

other than his spouse and his children.

    Simply put, no one other than Anthony would benefit from

such an SNT.   As a result, an SNT of this particular form in

Anthony’s name is an extension of Anthony.    The statute thus

does not bar the use of such an SNT to protect the ability of a

retired PFRS member’s disabled child to receive the survivors’

benefits and maintain his or her access to public assistance.

    Creating an SNT and making it the vehicle for, or

beneficiary of, Anthony’s survivors’ benefits is the only way to

protect Anthony’s financial interest and further the

                                24
Legislature’s avowed public policies in favor of both SNTs and

survivors’ benefits.    In that vein, the Appellate Division

erroneously concluded that the Legislature’s failure to

explicitly sanction so-called “Miller trusts” established by 42

U.S.C.A. § 1396p(d)(4)(B) implicitly suggested that all self-

settled SNTs were impermissible under New Jersey law.       That

conclusion is not compelled by the absence of any such trusts in

N.J.S.A. 3B:11-37.     There is another logical explanation for the

absence of Miller trusts from New Jersey’s SNT statute.      As

amicus NAELA explained, the Legislature simply was unable to

authorize Miller trusts because federal law prohibits the use of

such trusts in states, like New Jersey, that make use of a

medically needy Medicaid plan.    See 42 U.S.C.A. § 1396p(d)(4)(B)

(permitting use of Miller trusts to avoid Medicaid cap in states

that do not make use of medically needy Medicaid plan); N.J.A.C.

10:71-4.11(h) (indicating that New Jersey “cover[s] services in

nursing facilities under the medically needy component of the

Medicaid program”).    There is no compelling reason to conclude

that the Legislature meant sub silentio to prohibit the use of a

self-settled or first-party SNT created pursuant to 42 U.S.C.A.

§ 1396p(d)(4)(A).     Indeed, N.J.S.A. 3B:11-37 expressly

authorizes (d)(4)(A) SNTs.

    In sum, we conclude that the survivors’ benefits statute,

like the entire PFRS pension scheme, should be interpreted in

                                  25
light of its remedial character.     The statute should be

construed in a manner that furthers its fundamental purpose.

See, e.g., Wilson, supra, 209 N.J. at 572 (striving to avoid

absurd results, driven by narrow adherence to literal language,

which are “at odds with the overall statutory scheme”).

     The survivors’ statute exists for the purpose of benefiting

the spouse and children of deceased PFRS members.     Yet, disabled

persons, such as Anthony, are financially impaired by the

Board’s and the Appellate Division’s strict construction of the

survivors’ benefits statute.   As Saccone and the amici

convincingly have demonstrated, Anthony will almost certainly

become ineligible for several forms of public assistance should

his share of the survivors’ benefits automatically vest with him

in the normal course of benefits payments.     We cannot conclude

that the Legislature would abide a construction of N.J.S.A.

43:16A-12.1(a) that disserves the very people it was intended to

help.

     The Board’s strict view of how to implement the word

“child” in the survivors’ benefits statute when dealing with the

circumstances of an SSI-eligible disabled child of a PFRS

retiree forces this class of beneficiary into an untenable

situation.   The Board’s action requires a disabled child of a

PFRS retiree to choose between abandoning the survivors’

benefits earned by his parent or forgoing public assistance

                                26
programs for his medical needs.     That choice is unnecessary and

unwarranted.    The Board advances no legitimate public policy

through its rigid interpretation.      Both the federal government’s

SSI and related medical assistance programs and New Jersey’s SNT

statutes permit the use of self-settled (d)(4)(A) SNTs.

Ultimately, the Board’s determination foists what is essentially

a forfeiture of survivors’ benefits on disabled individuals such

as Anthony.

    All that must be determined is whether a first-party SNT

established for Anthony under § 1396p(d)(4)(A) may stand in his

place as the beneficiary to whom survivors’ benefits are due

under N.J.S.A. 43:16A-12.1(a).    We conclude that it may.

    We construe the reference to “child” in N.J.S.A. 43:16A-

12.1(a) to be equivalent to a first-party SNT established for a

disabled child, such as Anthony, pursuant to 42 U.S.C.A. §

1396p(d)(4)(A).   The Board erred in not accommodating Saccone’s

request, essentially, to reform the manner in which Anthony

would receive any future survivors’ benefits by making the

survivors’ benefits paid into such a first-party SNT for

Anthony.

    We hold that the Board’s contrary determination, affirmed

by the Appellate Division, was arbitrary, capricious, and

unreasonable.   Our holding requires that the Board’s

                                  27
determination be set aside and the matter remanded for further

administrative action consistent with this opinion.

                                V.

    The judgment of the Appellate Division is reversed and the

matter is remanded to the PFRS Board for further proceedings

consistent with this opinion.

     CHIEF JUSTICE RABNER, JUSTICE FERNANDEZ-VINA, and JUDGE
RODRÍGUEZ (temporarily assigned) join in JUSTICE LaVECCHIA’s
opinion. JUDGE CUFF (temporarily assigned) filed a separate,
dissenting opinion in which JUSTICE PATTERSON joins. JUSTICE
ALBIN did not participate.

                                28
                                         SUPREME COURT OF NEW JERSEY
                                            A-49 September Term 2012
                                                     071841

THOMAS SACCONE,
     Plaintiff-Appellant,
          v.
BOARD OF TRUSTEES OF THE
POLICE AND FIREMEN'S
RETIREMENT SYSTEM,
     Defendant-Respondent.

    JUDGE CUFF (temporarily assigned), dissenting.

    This appeal presents the narrow issue of whether the

disabled son of a retired member of the Police and Firemen’s

Retirement System (PFRS) may have his survivors’ benefits paid

into a first-party special needs trust (SNT) created for him

pursuant to federal law.     The majority holds that he may,

reasoning that the PFRS Board of Trustees (Board) and the

Appellate Division adopted a rigid interpretation of the PFRS

survivors’ benefits statute that undermines the statutory

purpose of a survivors’ benefit to a disabled child.     Ante at

___ (slip op. at 2).   In doing so, the majority reverses the

administrative action taken by the Board, as well as the

decision of the Appellate Division, which concluded that the

Board’s determination was not arbitrary, unreasonable, or

capricious.   Id. at ___, ___ (slip op. at 2-3, 8).
    This appeal presents a straight-forward question of

statutory interpretation.   This appeal is not about the good

faith of Thomas Saccone, the retired PFRS member.   This appeal

is not about the wisdom and benefits of an SNT for a disabled,

dependent child.   Indeed, we have acknowledged the importance of

such trusts in any plan for the financial security of a

disabled, dependent child and have endeavored to set forth an

analytical framework to further such planning when the parents

of a disabled, dependent child have divorced.   J.B. v. W.B., 215

N.J. 305, 324 (2013).

    While I agree with the majority’s conclusion that the

Board’s application of N.J.S.A. 43:16A-12.1(a) led to an

unfortunate result in this case, the plain language of the

statute prohibits a PFRS member from designating the beneficiary

of his or her survivors’ benefits.   The public policy favoring

the establishment of SNTs should not supersede the plain

language of the statutory provisions which prohibit a retiree

from designating a beneficiary other than his spouse or child.

Further, the various amendments made to the statute in 1967

evince an unequivocal legislative intent to exclusively limit

the survivors’ benefit.   Therefore, I respectfully dissent and

would affirm the Appellate Division judgment.   Any changes to

the statute which would allow a retiree to designate an SNT as a

beneficiary are best left to the Legislature.

                                 2
                                 I.

    The question before this Court is one of statutory

interpretation.    The goal of statutory interpretation is to

“discern and effectuate the Legislature’s intent.”     Patel v.

N.J. Motor Vehicle Comm’n, 200 N.J. 413, 418 (2009) (quoting

State v. Brannon, 178 N.J. 500, 505 (2004)).     “The plain

language of the statute is [the Court’s] starting point.”       Ibid.

The Court applies “the generally accepted meaning of the words

used by the Legislature and strive[s] ‘to give effect to every

word.’”    Ibid. (citations omitted).   However, words and phrases

should not be read in isolation; rather, they should be read in

proper context, in relation to one another, to give meaning to

the whole of the statute.    See Burnett v. Cnty. of Bergen, 198

N.J. 408, 424-25 (2009).

    If the plain language of the statute is unambiguous, the

meaning is clear and the interpretive process is complete.

Patel, supra, 200 N.J. at 419; State v. Gelman, 195 N.J. 475,

482 (2008) (citing DiProspero v. Penn, 183 N.J. 477, 492

(2005)).   In interpreting a statute, we presume that the

Legislature acted to create a logical scheme and should not look

to impute avoidable contradictions.     State v. Hudson, 209 N.J.

513, 542 (2012) (citing State v. Haliski, 140 N.J. 1, 9 (1995)).

That is, we should not give a strained interpretation so that

one statutory clause is hopelessly at odds with another.      Id. at

                                  3
541-42.     “[I]f the statutory language is susceptible to ‘more

than one plausible interpretation,’” then we can “turn to such

extrinsic aids as legislative history for help in deciphering

what the Legislature intended.”        Gelman, supra, 195 N.J. at 482

(quoting DiProspero, supra, 183 N.J. at 492-93).       If the statute

is ambiguous or silent on a particular point, a court should not

substitute its judgment for that of the agency, provided the

agency’s determination is “‘based on a permissible construction

of the statute.’”     Kasper v. Bd. of Trs. of Teachers’ Pension &

Annuity Fund, 164 N.J. 564, 581 (2000) (quoting 2 Am. Jur. 2d

Admin. Law § 525 (1994)).

                                  II.

    The police and fireman retirement program, N.J.S.A. 43:16A-

1 to -68, was established to create “a statewide pension system

for full-time policemen and firemen designed to ensure the

uniform protection of all such public officers through the

medium of pensions payable from a fund maintained upon a sound

actuarial basis.”     Ante at ___ (slip op. at 13); accord N.J.S.A.

43:16A-2.    PFRS is defined as “a pooled annuity defined benefit

fund” in which “[o]nly a member’s contributions are attributable

to the member” and “[a]ll of the remaining assets are ‘pooled’

for the entire system.”     LaSala v. LaSala, 335 N.J. Super. 1, 7

(App. Div. 2000), certif. denied, 167 N.J. 630 (2001).

                                   4
    There is no ambiguity in the language of the statute.        On

the death of a member, the spouse and any qualifying child or

children receive the prescribed survivors’ benefits.       Although I

discern no ambiguity in this language, the legislative history

of survivors’ benefits for PFRS members underscores this

interpretation and helps shed light on the considerations taken

into account by the Legislature.

    In 1920, the Legislature enacted the Pension Act of 1920,

L. 1920, c. 160, which established a single uniform retirement

law, covering all police and firemen.      In 1944, due to the

“explosive” increase in municipal deficiency appropriations, the

Pension Act was amended to “reduce[] the existing liabilities

through the reduction of pension benefits, eliminat[e]

additional liabilities through the closing of membership to the

funds, and rais[e] . . . assets through increased contributions

by members, municipalities, and State, substantially improv[ing]

the financial status of the 1920 funds.”       Report of the N.J.

Advisory Comm’n on Local Police & Firemen’s Pension Funds 11, 13

(Feb. 1, 1952).   The statewide PFRS was established, which

covered all new police and fire employees.

    When PFRS was first created in 1944, it allowed members a

right to elect one of three optional forms of retirement and

designate any beneficiary as the recipient of his retirement

allowances.   N.J.S.A. 43:16A-12.      Pursuant to the statute, the

                                   5
PFRS member would receive a reduced retirement allowance in

exchange for the survivors’ benefits.   Ibid.    Thus, the member

determined how and to whom such payment would be assigned.

     In 1967, the Legislature repealed N.J.S.A. 43:16A-12,

thereby removing all three retirement options.     L. 1967, c. 250,

§ 31.   In lieu of the options, the Legislature created a

survivors’ pension benefit, N.J.S.A. 43:16A-12.1, which provides

a life annuity to the member’s surviving spouse and/or child

“without additional contributions by the member or reduction in

the member’s retirement benefits.”   LaSala, supra, 335 N.J.

Super. at 8.   N.J.S.A. 43:16A-12.1(a) provides:

           Upon the death after retirement of any
           member of the retirement system there shall
           be paid to the member’s widow or widower a
           pension of 50% of final compensation for the
           use of herself or himself, to continue
           during her or his widowhood, plus 15% of
           such compensation payable to one surviving
           child   or   an  additional    25%  of   such
           compensation to two or more children; if
           there is no surviving widow or widower or in
           case the widow or widower dies or remarries,
           20% of final compensation will be payable to
           one    surviving   child,    35%   of     such
           compensation to two surviving children in
           equal shares and if there be three or more
           children, 50% of such compensation would be
           payable to such children in equal shares.

Pursuant to the statute, a set percentage of a member’s death

benefits is automatically provided to the member’s surviving

spouse and/or child, without requiring additional contributions

or reductions of the member’s retirement benefits.     See LaSala,

                                 6
supra, 335 N.J. Super. at 8.    The statute establishes greater

benefits to both the member and his or her family.     By opting

for a mandatory benefit to the surviving spouse and/or child,

the member may not nominate a beneficiary.     The statute was

amended again in 1971, 1985, 1991, and 1999.    At none of these

times was the language of the statute changed to allow for the

member to change the beneficiary to any person or entity other

than the surviving spouse and/or child.

                                III.

       The majority reasons that the plain language of the statute

is at odds with the legislative intent and policy purposes of

the statute.   Ante at ___, ___ (slip op. at 2, 26).   It states

that the Board’s “strict view” on how to interpret the word

“child” would force disabled children of PFRS retiree’s into “an

untenable situation” where the child must choose between the

survivors’ benefit and public assistance programs.     Id. at ___,

___ (slip op. at 2, 26-27).    Further, the majority contends that

“[n]o legitimate public policy is advanced by the Board’s rigid

interpretation.”    Id. at ___, ___ (slip op. at 2, 27).   However,

one of the central tenets of statutory interpretation provides

that the Court should apply the generally accepted meaning of

the words used by the Legislature.     Patel, supra, 200 N.J. at

418.    To infer that the Legislature intended to include first-

person SNTs in its definition of “child” requires a substantial

                                  7
leap which is not supported by our principles of statutory

interpretation.

    Additionally, words and phrases should not be read in

isolation; rather, they should be read in proper context, in

relation to one another, to give meaning to the whole of the

statute.   See Burnett, supra, 198 N.J. at 424-25.    In this case,

the statutes which work together with N.J.S.A. 43:16A-12.1(a)

similarly prevent the member from assigning his benefits.    For

example, the section titled “Exemption from taxes, garnishment,

etc.; assignment of group insurance policy rights and benefits,”

N.J.S.A. 43:16A-17, provides in relevant part:

           The right of a person to a pension, an
           annuity, or a retirement allowance, to the
           return of contributions, any benefit or
           right accrued or accruing to a person under
           the provisions of this act and the moneys in
           the various funds created under this act . .
           . shall be unassignable.

Likewise, the PFRS regulation titled “Beneficiary designation;

pension contributions,” N.J.A.C. 17:4-3.5(b), prohibits a

retiree from designating a primary or a contingent beneficiary

as the recipient of the retiree’s pension benefits.     It states:

“A retiree cannot designate a primary or a contingent

beneficiary for the receipt of the retiree’s accumulated pension

contributions in the event of the retiree’s death.”     N.J.A.C.

17:4-3.5(b).

                                 8
    The legislative history of the PFRS survivors’ benefit

statute, specifically the repeal of N.J.S.A. 43:16A-12 and the

removal of its elective language in its replacement, N.J.S.A.

43:16A-12.1(a), further evinces the Legislature’s intent to

divest the retiree’s ability to designate a beneficiary and to

exclusively limit the pension benefit to surviving spouses and

children.    The PFRS regulation, N.J.A.C. 17:4-3.5(b), and

N.J.S.A. 43:16A-17 are consistent with the restrictive language

of N.J.S.A. 43:16A-12.1(a).

    The majority relies on the public policy of providing for

the financial well-being of a member’s surviving spouse and

children.    Ante at ___ (slip op. at 16-18).   It is true that our

Court may intervene “in those rare circumstances in which an

agency decision is clearly inconsistent with its statutory

mission or with other State policy.”    Mazza v. Bd. of Trs.,

Police & Firemen's Ret. Sys., 143 N.J. 22, 25 (1995).    “Pension

legislation is remedial in nature and should be liberally viewed

in favor of the employee.”    In re Van Orden, 383 N.J. Super.

410, 420-21 (App. Div. 2006).   Thus, “courts should keep in mind

that pension statutes are designed to benefit the public

employee.”   Id. at 421.

    However, the majority’s broad statement of public policy is

at odds with the plain language of the statute, which implements

the legislative intent to restrict the retiree’s ability to

                                 9
designate a beneficiary.   I am not unsympathetic to the member’s

effort to bolster the financial security of his disabled,

dependent son.   In the end, however, the ability to substitute

an SNT for the exclusive benefit of a member’s child is a matter

for the Legislature.

                                IV.

    I would affirm the Appellate Division.   Therefore, I

respectfully dissent.

    JUSTICE PATTERSON joins in this opinion.

                                10
               SUPREME COURT OF NEW JERSEY

NO.   A-49                                      SEPTEMBER TERM 2012

ON CERTIFICATION TO            Appellate Division, Superior Court

THOMAS SACCONE,

      Plaintiff-Appellant,

              v.

BOARD OF TRUSTEES OF THE
POLICE AND FIREMEN’S
RETIREMENT SYSTEM,

      Defendant-Respondent.

DECIDED            September 11, 2014
                Chief Justice Rabner                          PRESIDING
OPINION BY               Justice LaVecchia
CONCURRING/DISSENTING OPINIONS BY
DISSENTING OPINION BY                    Judge Cuff

                                  REVERSE AND
CHECKLIST                                                     AFFIRM
                                      REMAND
CHIEF JUSTICE RABNER                        X
JUSTICE LaVECCHIA                           X
JUSTICE ALBIN                     ----------------------   ------------------
JUSTICE PATTERSON                                                  X
JUSTICE FERNANDEZ-VINA                     X
JUDGE RODRÍGUEZ (t/a)                      X
JUDGE CUFF (t/a)                                                   X
TOTALS                                      4                      2