Your Beneficiary Form Decides Who Gets Your NJ Pension
In many cases, beneficiary designation forms determine where assets like your New Jersey pension benefits, your retirement accounts or life insurance go. This is regardless of what is written in your will.
Here we discuss why beneficiary reviews are an important part of estate planning, common mistakes involving old beneficiary forms, and what New Jersey public employees should know about PERS, TPAF, and PFRS accounts.
Key life events ought to serve as a reminder to review your beneficiary designations and why keeping this information current can help avoid unintended outcomes.
Key Takeaways
• Beneficiary designation forms often override instructions contained in a will.
• Old beneficiary elections can remain in place for decades if never reviewed.
• Divorce, marriage, births, adoptions, and deaths in the family are common triggers for beneficiary reviews.
• New Jersey pension members should periodically review beneficiary information through MBOS.
• Retirement accounts, pensions, and life insurance policies should be reviewed as part of a broader estate planning process.
Your Beneficiary Form Decides Who Gets Your NJ Pension – Not Your Will – Links
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Your Beneficiary Form Decides Who Gets Your NJ Pension – Not Your Will – Transcript
Your will doesn’t decide who gets your New Jersey pension, but this form does.
You could have the best will in New Jersey, something that’s signed, witnessed, notarized, sitting safely in a vault somewhere.
It still isn’t going to decide who gets your pension, who gets your 401(k), who gets your life insurance.
Something else does, and very few people ever look at it.
Your will is going to cover your house, your car, your bank accounts.
It doesn’t cover your retirement accounts, probably doesn’t cover your life insurance.
Those go to whoever is named on the account, the beneficiary.
That form that you filled out probably years ago!
And that name, whatever’s on that form, is going to beat your will.
So if your will says, “Everything is going to my spouse or my spouse and my kids,” but your old 401(k) still lists your brother as the beneficiary, guess what?
The account is paying your brother.
What’s in the will never even gets considered.
Look, if you’re in New Jersey, and suppose you’re a teacher or a police officer or a firefighter, anyone who works for a township, or, say, you work for Monmouth County, or suppose you work for the state of New Jersey.
You’ve got one of these ……you may have forgotten about:
PFRS. That’s Police and Fire Retirement System.
The PERS, that’s for Public Employees Retirement System.
Or the TPAF, which is the Teachers’ Pension.
If you’re in a New Jersey pension, one of these, PERS, TPAF, PFRS, there’s a designation of beneficiary on file with the Division of Pensions over in Trenton.
And it covers two things.
It covers your pension death benefit.
And your group life insurance.
The state pays the last name that’s listed on that beneficiary form.
If you leave it blank, it’s going to go to your estate.
You probably didn’t want that to happen.
Most people, though, fill that form out on the day that they’re hired.
And then they never touch it again, or they never look at it again.
So suppose you got started working on the job when you were 25 years old.
You were 25 and single. So you put down your mom’s name as beneficiary.
30 years go by, (now) you’re married, you have kids……
But the form still says your mom is the beneficiary.
Good old Mom.
She’s been dead for 15 years.
Now, divorce is probably the worst version of this.
Someone splits up, maybe they remarry, maybe they don’t.
Either way, they build a whole new life.
And then, they die.
Sometimes with the ex- still listed as the beneficiary on the form.
Guess what?
The state is going to pay the ex.
We’ve seen it happen.
This really does happen in reality, in real life.
And nobody can undo it afterwards.
So it’s not always as simple as changing the name, though.
The state can refuse a change that violates a court order.
So, be careful.
Some divorce agreements make you keep the ex- listed as beneficiary, so check it.
Make sure that it matches the divorce decree.
And if there’s any doubt, ask your attorney.
For goodness sakes, you paid him or her enough.
And please don’t say, “Yeah, I’ll get to it. I’ve been meaning to get to it. I’m gonna get to it.”
The third leading cause of death in New Jersey are what they call “unintentional injuries.”
Do you know what that is?
It’s people drowning, falls, traffic accidents.
These are things that you don’t plan for.
They’re unintentional.
These things happen.
Don’t put it off.
So this weekend, you have some homework.
Two things to do.
First, look at every account where there’s a beneficiary listed.
So we’re talking about your 401(k). We’re talking about, maybe your 457 plan, your life insurance.
Your IRAs, you may have them scattered all over the place.
See who is actually on the form.
See who’s listed as the beneficiary.
Don’t guess!
Second bit of business: if you’re in one of these New Jersey retirement programs, it’s pretty simple.
Log into MBOS. You know what that is.
Just log in. You can check your beneficiary designation right there on the website.
You can update it right on the website, too.
So the state even tells you to look at these kinds of things after any big life event.
You know, marriage, divorce, a new addition to the family, a new baby, an adoption, when there’s a death in the family.
These are the exact times people get busy.
They get busy doing other things, and they forget to check this information or to update it.
Incidentally, almost one-third of all New Jersey residents die without a will.
This is just about the stuff that WON’T be covered by your will, the things that your will won’t cover.
They won’t reach it.
Go look at those forms.
And if you want another set of eyes to look over it with you, you know where to find us!
Thanks for watching “Your beneficiary form decides who gets your New Jersey pension”
