(1) I second what @notrichenough has suggested. In cases where the result sounds unjust, publicity might be the way to go;
(2) Firmly suggest that the widow and surviving family NOT agree to anything during this time of grief and trauma, especially when so much is at stake. If documents are signed agreeing to anything, it will be very hard to revoke any agreement to settle for less;
(3) Ask the surviving family to check whether there is employer-provided life insurance to see if there is financial support that can tide them over until the pension issue is resolved;
(4) If you are helping the surviving family, gather ALL relevant documents while you are doing the fact checking so that when the “case” has to be presented, you have evidentiary support. How cooperative is the human resources department in this situation?
In NJ you get either the life insurance or the pension with a much smaller life insurance payment. You cannot take the larger insurance to tide you over while you attempt to get the pension.
The insurance I mentioned (not sure if you are addressing me) would be health insurance for the family. Covered with 25 years of service, not covered with 24 years.
To clarify, many employers (not sure about government ones) provide some nominal life insurance (1X or 2X annual salary, for example) at no cost to the employee. The family should check whether that was a benefit.
atomom- health insurance in NJ is a retirement benefit in retirement but you must have 25 years to earn it. If you are a State employee you only keep the health coverage while the employee is alive. Once they pass the family no longer has the employer coverage.
In NJ you can retire with less than 25 years if you are 60 or over but you retire without HC.
Talked to someone helping the family with finances. He thought it was a done deal, but I gave him the idea of contacting the legislator about it–he hadn’t thought of that, but thought it was worth a try. I pointed out that this will not cost the state any extra money. He said the employee had almost a year of unused vacation time. Sad. Just hoping they will reconsider, but not counting on it. There was some life insurance through employer. He had a little bit. Sadly, he had just applied for more life insurance the week he died, but it was determined that this policy was not yet in effect for whatever reason. Terrible luck.
Tell this person helping the family not to assume anything is a done deal.
I vaguely recall there is something about what happens if someone dies while an insurance application is “in underwriting review,” assuming the application was actually complete. I’ll take a look to see if I find something. You didn’t indicate if this was a separate policy or an increase in amount through the employer, but it may not make any difference in result.
Edited to add: someone needs to review the application he made for additional life insurance and find out at what stage of the application process he was in.
Based on a very cursory look, here’s a quick summary I found. In no way is this definitive, but it lays out some key items and dates for determining when a life insurance policy takes effect should an applicant die in the interim. It’s a thorny area:
I’m surprised that vacation pay doesn’t count. In this state by statute it is earned time. Just like they have to pay it out after your last day. Otherwise they would “not count” vacation from prior years when calculating time on the job (okay Jack you need to work two more weeks past your anniversary hire date because in 1975 you went to Disneyworld). That said, our legislature has frequently revised the rules but they are usually prospective rather than retroactive. (EG limiting how much vacation you can carry over year to year) I wonder if that rule was in force when he started. Also other non state time like county or other govt agency time might count. Signed a lawyer from another state.
In my state service time accrues when you are contributing to the pension plan. So paid vacations taken while you are still working will count because pension contributions are taken from the vacation pay. When you cash in accumulated vacation when you retire, since you are not working any more, and therefore not contributing to the plan, you don’t get service credit.
There’s at least one state agency that lets you cash out unused vacation during your last three years, and count that as regular compensation for the purpose of computing your pension amount. It’s a flagrant abuse IMO.
I think the state has clamped down on how much vacation and sick time you can accrue, so you don’t see people retiring with years of vacation piled up any more.
For something like this? A lawyer who practices in this area of law. Worth every penny. There may not be any do-overs, so it is important not to file anything until there has been good legal review.
Thanks for your ideas/advice/comments. Military time has been counted. The life insurance was a separate term policy and I guess it hadn’t been approved yet, but not sure of details. Guy helping with finances will try appeal on pension decision. He said employer/union are supportive, but pension board is against. Maybe letters from union/employer as well as family could help with appeal.
Ok. I’ll kick of a new topic. We are about to drop some term insurance. We originally to it to make sure we had coverage, even if unemployed. Now both kids are through college, and DH is 60 so getting more costly. It will go up by about 10% per year, so we think it no longer makes sense. We’ll make the final decision this week. ((We still do have other whole life policies, plus policies through work til retirement).
Same here @colorado_mom. Years ago, I was a SAHD and we had many years of education to pay for. I can’t remember what multiple of wife’s salary we insured, but since her comp is heavily bonus based, I think we went for 6x salary. We started reducing it by 1x each year.
I have not made the selections for my wife’s new job benefits yet, but we will probably just go with the default company provided term insurance.
I don’t think it makes sense to keep expensive insurance, if there is nobody that depends upon your salary to get by. I think if you have adequate assets if one person dies, then you’re probably paying too much for something you don’t need. However, if it’s really cheap, I guess it could be a bonus for the other person.
We’re keeping DH’s big policy at this point. He has not yet qualified for retiree medical, and since my meds run in the six figures and our medical OOP is in the five figures, I would need funds above and beyond SS/pension/401(k) between now and when I’d qualify for Medicare. My insurance policy is fairly inexpensive, and since I am otherwise uninsurable, I’m not inclined to drop it. It was intended to provide college funds for the guys if anything happened to me. Now I think I’ll leave some for DH, and the rest as an educational trust for my sons and their future families.
If you truly don’t have an insurable loss - in this case the earning ability of the insured - then it makes sense to drop the term. It sounds like you’ve done the analysis and have come to that conclusion, especially as you have other coverage.
I have the same issue, with regard to insurance on my H that will expire next year because we obtained a 20-year term policy when D was gestating. We have enough for self-insurance, but I prefer that H have an individual policy providing coverage at least until D is completely out of school. I’ve run some numbers for the coverage we want and the cost is not material in the overall scheme of things. It’s for my peace of mind.
If it makes you feel better about cancelling the policy, then you should dutifully invest the amount saved going forward.
The harder decision for us will be what to do about another policy that has cash value which we acquired when we were less exacting in our analysis. I’m crunching those numbers now.
We had to decide about whether or not to keep H’s term policy when he retired. It’s not a huge amount-- equal to his salary at retirement. We decided to keep it because the premiums were guaranteed and level and equal to the premium refund we get annually from his paid up whole life policy.
These two policies are all the life insurance we’ve ever had and will help soften the financial impact of the 45% reduction in pension if I become a widow before being eligible for SS (which could happen).
It’s definitely a numbers crunching thing to decide whether the cost of premiums (especially as they increase with age) are worth the coverage.
Keep in mind it becomes increasingly difficult to get coverage as we get older and may have disqualifying health conditions.
