Why Naming a Beneficiary Is So Important.

The New Jersey Supreme Court’s decision in Keith Isaac, Deceased v. Board of Trustees, Police and Firemen’s Retirement System underscores the critical importance of formally designating a beneficiary for unpaid pension benefits. Although Isaac had listed his estranged spouse in the “Marital/Survivor Information” section of his retirement application, this only applied to the automatic survivors’ pension and not to unpaid benefits, which by statute (N.J.S.A. 43:16A-12.2) require an explicit written designation. Because no such designation was made, the Court held that the $208,950.03 in unpaid benefits must go to Isaac’s estate, not his estranged spouse. The ruling rejected the Board’s attempt to infer intent or rely on survivor information, finding its decision arbitrary and contrary to statutory requirements. The case serves as a clear reminder that without a properly executed written designation, unpaid pension funds default to the estate, and agencies cannot expand statutory language to protect presumed family interests.