Firefighter May Designate Special Needs Trust as Beneficiary of Pension

Vanarelli during oral arguments

In a case argued by ElderLawAnswers member attorney Donald Vanarelli, the New Jersey Supreme Court reverses a lower court and holds that a firefighter may designate his son's special needs trust as the beneficiary of his pension plan. Saccone v. Board of Trustees of the Police and Firemen's Retirement System (N.J., No.  A-49-12, 071841, Sept. 11, 2014).

Thomas Saccone, a retired New Jersey firefighter, asked the New Jersey Police and Firemen's Retirement System (PFRS) for permission to name his severely disabled son's special needs trust as the contingent beneficiary of his $4,254.37 monthly pension. PFRS refused to allow Mr. Saccone to name the trust as a beneficiary, claiming that only widows or children of a firefighter are entitled to the pension benefit and that the statutory definition of a "child" does not include a trust.

After Mr. Saccone requested a formal opinion from the PFRS, an appeals court ruled that the PFRS did not have to issue an advisory opinion at all. However, the Supreme Court of New Jersey overturned the court's decision and required the PFRS to issue the opinion, which it did, denying Mr. Saccone's request. Mr. Saccone appealed, arguing that the pension laws should be liberally construed to assist firefighters' families and that New Jersey public policy favors the creation and funding of special needs trusts. A New Jersey appeals court upheld the denial of Mr. Saccone's request, and Mr. Saccone appealed.

The New Jersey Supreme Court reverses, holding that Mr. Saccone can name a special needs trust as the beneficiary of his pension. The court rules that the reference to "child" in state law is equivalent to a first-party special needs trust established for a child with special needs. According to the court, the PFRS'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" that does not advance any public policy. Two judges dissent.

For the full text of this decision, click here. 

Mr. Vanarelli has represented Mr. Saccone for six years, and we congratulate him on his perseverance and eventual victory.  For Mr. Vanarelli’s blog post on the decision, click here. 

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