I am not the biggest expert on pension plans but given what I know and am reading here is there someone higher up in the Pensions Department you can talk to? It sound like it possible there is a misunderstanding at the level you are currently speaking to.
Also, you mention it is important you live in NJ.
Do you work for a government body? That can make a big difference and can be an important fact for the experts around here to know. Public pensions have very different rules than a private pension plan as a general rule.
The goal of a QDRO in a defined benefit plan is to provide an Alternate Payee (AP) a portion of participant's benefit for AP's life. In a case of a Shared Interest QDRO, an Alternate Payee is assigned a portion of participant's benefit over participant's life. To ensure that the Alternate Payee will actually be receiving some benefits until he/she dies, the Shared Interest QDRO is forcing a participant to elect a J&S benefit, so upon participant's death, the shared portion payable to AP will stop, and J&S portion will start. However, this requirement applies only, and I am using words from your QDRO, "to the extent of the calculated interest".
Here is a simple example: The total benefit is $1,000 per month under 50% J&S. Marital portion of this benefit is $600 per month. AP is assigned 50% of the marital portion under the shared interest QDRO. Essentially it means that you are "receiving" $600 and "sharing" it with your ex 50/50 (each receives $300). When you die, you stopped receiving $600 and there is nothing to share anymore. The 50% J&S provision kicks in where AP receives 50% of the total benefit of $600, i.e. AP continues to receive the same $300, she was receiving before you died. Furthermore, the remaining $400 are not part of the marital portion, and you should be able to elect any other beneficiary for this benefit. However, if your marital portion is 100% of your total benefits, I think there is nothing you can do to change it, unless you will be able to completely nullify the existent Shared Interest QDRO and create new Separate Interest QDRO.
Your pension department should split your total benefit to "marital" benefit and "non-marital" benefit in regard to your ex and treat these separately. The "marital" benefit will be subject to the QDRO, and "non-marital" benefit will be subject to your election.
