1. If the employee has filed a written designation of beneficiary, the final payment of compensation due a deceased employee of the State, or of any county, city, town, township, district or any other political subdivision of the State, is not the employee’s property or that of the employee’s estate but must be released to the designated beneficiary upon the written request of the beneficiary.
2. If the deceased employee has not filed such a designation with the employing public entity of the employee, the final payment is a part of the employee’s personal estate.
3. As used in this section, “final payment” means the net amount due the employee after the deduction of all lawfully withheld sums from the employee’s gross compensation.